In India cost of Petrol less than cost of Bottle water

In India the cost of Petrol and Diesel is less then the cost of Bottle Water. Surprised ??  Yes, The cost of these petroleum products are less then bottled water for the Major Petroleum Companies.

Later the companies less them at a huge price which we have to pay. The increased price includes huge profits + Taxes.

Read the following Article explaining it from economic times.

Back-of-the-envelope calculations show that a litre of petrol costs about Rs 11 and diesel about Rs 13, excluding transportation and sundry other charges etc. In contrast, you pay Rs 12-15 for a one-litre bottle of water.

Here’s how the arithmetic goes: A barrel of crude oil contains about 190 litres. At $38 a barrel, the current price in the international market, each litre of crude works out to Rs 10, taking the exchange rate at Rs 50 to a dollar.

On an average, approximately 28-29 litres of petrol and 85 litres of diesel are refined from each barrel of crude.
Admittedly, this figure can vary according to the type of crude being processed and the technology deployed in a refinery. So how much would the price of a litre of motor fuel be after incurring the cost of refining, if there were no other charges?

The calculation is so mind-boggling that sometimes even executives of oil marketing companies get confused by the myriad central and state taxes – levied at incremental rates – and complex charges such as “freight equalisation levy” and dealer margins, etc. Such levies taken together constitute 45-55% of the sale price of petrol or diesel.

So if petrol costs a little over Rs 45 a litre in Delhi pumps, taxes and levies make up about Rs 22 and another Rs 12 constitutes the oil-marketing firm’s profit. That leaves a basic cost of about Rs 11 per litre. Similarly, at Rs 32 a litre – the Delhi price of diesel – the actual cost can be taken as Rs 13 as the companies are making a profit of almost Rs 3 a litre.

These calculations are admittedly simplistic and do not take into account other products such as kerosene, jet fuel, cooking gas, naphtha, etc., that are produced along with petrol and diesel and have a bearing on the final cost of each product. However, there won’t be big difference between these figures and the figures worked out by the industry.

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sources: economic times

2 Comments for “In India cost of Petrol less than cost of Bottle water”

  1. In India cost of Petrol less than cost of Bottle water…

    In India cost of Petrol less than cost of Bottle water…

  2. In India cost of Petrol less than cost of Bottle water | Official xKmph.com Blog…

    In India cost of Petrol less than cost of Bottle water…

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