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Explainer: Petrol is being sold at ₹ 115 per liter; less than half the government’s cost, then why is the fuel so expensive? understand the whole game

By Samira Vishwas

Petrol Price Breakdown: In Chittoor, Andhra Pradesh, petrol is being sold at the price of Rs 118.34 per liter today, Friday, July 3, 2026. At the same time, the price of petrol in Hyderabad is Rs 115.69 per liter. Andhra Pradesh is a state in the country where fuel is generally more expensive than other states. Even in most parts of the country, the price of petrol ranges from Rs 102 to Rs 110 per liter.

Amidst the ongoing conflict in the Middle East, India’s government oil marketing companies have increased the prices of petrol and diesel by up to Rs 7.5 per liter. In such a situation, now that the prices of crude oil have come down in the international market, the demand to reduce fuel prices has intensified in India too.

Total expenditure on one liter petrol

At present the price of crude oil in the international oil market is $ 70 per barrel. If India buys crude oil from other countries at this price, then the base price of one liter petrol is Rs 52 to 55 per liter. This also includes charges like original cost, refining and transportation. But, the real question starts that when a country buys petrol for Rs 52 to Rs 55, how does it sell petrol to the people of its own country at a price as high as Rs 115? Let us know all the reasons why the price of petrol coming to India from other countries doubles.

The game behind expensive petrol

According to the report, in June 2026, crude oil has become cheaper by 30 percent, from $ 120 to $ 70 per barrel. India buys 90 percent of its crude oil needs from abroad in dollars. However, despite cheap crude oil, the biggest reason for expensive petrol and diesel in India is the different taxes imposed by the Indian and state governments. Directly, the Government of India (both Central and State) collects around Rs 45 to Rs 50 tax on one liter of petrol, which shows the maximum impact of the increase in the prices of petrol and diesel.

  • Crude Oil Price and Refining (Base Price): Rs 52-55 per liter
  • Central Government Tax (Excise Duty): Rs 20-22 per liter
  • State Government Tax (VAT): Rs 15-18 per liter
  • Dealer Commission: Approximately ₹4 per liter

Petroleum Minister on petrol prices

The Hormuz crisis has been averted after the agreement between America and Iran. Since then in India Reduction in prices of petrol and diesel It is being expected. On Thursday, July 2, Union Petroleum Minister Hardeep Singh Puri said that if the decline continues for the next two to three months, prices may come down. On the increase in petroleum prices in the country, he said that due to the Iran-America conflict, the prices of petrol across the world increased by about 35 percent. At the same time, in India there has been an increase of only 5.58 percent.

How much has petrol become expensive in 4 years?

Minister regarding petrol prices Hardeep Singh Puri Said that I looked at the petrol prices from June 2022 to June 2026, four years ago the price of petrol in Delhi was Rs 96.72 and in June 2026 it was Rs 100.2, in 4 years the prices of petrol increased by only 5.58% and that of diesel increased by 6.23%. What I am saying is that prices have never increased, prices for consumers have never increased. The government has reduced excise duty in November 2021, May 2022, 10 March 2026. The increase of Rs 10 each on petrol and diesel is not for the consumers but for the budget, the fiscal system will bear it.

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‘The whole world is in the grip of expensive fuel.

Union Petroleum and Natural Gas Minister Hardeep Singh Puri further said that there are wrong discussions about increasing the prices of petrol and diesel in the country. On the rise in prices of petrol and diesel in other countries, he said that in the last four months, petrol prices have increased by 17.74% in France, 19.05% in Germany and 18.39% in Italy. Apart from this, an increase of 39.77% was seen in our neighboring countries Pakistan, 36.66% in Sri Lanka, 20.3% in Nepal and 42.69% in Bangladesh.

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