Difference between revisions of "Fuel Prices India"

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{{Fuel Price Factsheet
 
{{Fuel Price Factsheet
 
|Fuel Price Country=India
 
|Fuel Price Country=India
 +
|Fuel Pricing Policies=The Ministry of Petroleum and Natural Gas supervises both the upstream and downstream fuel sectors in India (http://petroleum.nic.in/). While there is plenty of legal information on the ministries website, clear and easy-to-understand information regarding fuel price breakdowns and further pricing policies is missing. Annual reports offer detailed top-level-statistics and also fuel price timelines.
 +
 +
The downstream market is open to private companies. The fuel price is regulated via maximum prices, which are set by the government / the ministry several times a year (depending on the degree of volatility of international crude oil prices). Prices are changed on an ad-hoc basis and in times of high crude oil prices OMCs are forced to sell at prices levels that do not cover the overall costs. This leads to temporary huge losses for oil companies that need to be outbalanced by the government. Thus, in fact fuels (especially diesel) are subsidized in India (→App. A1). Taxes on diesel are much lower than on gasoline.
 +
 +
Indian states impose different taxes on fuels. Also, every state imposes VAT independently.
 +
 +
"Government heavily subsidizes the prices of LPG and kerosene for household use. Subsidized kerosene is rationed and distributed through the Public Distribution System, which also delivers subsidized food. Two separate government committees in 2006 and 2008 recommended moving away from subsidizing the kerosene price to cash transfer to the poor. In 2011, another proposal was made, shifting from a price subsidy to a monthly cash transfer of Rs. 300 (about US$6.50) delivered to women. As of 2010, there were 120 million LPG customers and 850 million cylinders in circulation. Government’s vision of covering 100% of population with gas has led to a target of adding another 50 million customers to increase coverage from 50% to 75%. The prices of non-branded diesel and at times non-branded gasoline have also been kept below market levels. Compensation for losses suffered by the three state-owned oil companies marketing subsidized fuels was Rs. 120,000 million (actual, US$2.5 billion) in fiscal 2009/10 (Apr–Mar), Rs. 350,000 million (actual, US$7.7 billion) in fiscal 2010/11, Rs. 650,000 million (revised budget, US$13.6 billion, up from Rs. 200,000 million originally budgeted) in fiscal 2011/12, and Rs. 400,000 million (original budget, US$7.7 billion as of Apr 2012) in fiscal 2012/13, apart from an additional US$0.6 billion set aside for LPG and kerosene in each fiscal year. In the first quarter of fiscal 2012/13, the three companies posted combined losses of Rs. 405 billion (US$7.5 billion) on fuel sales. Lack of timely reimbursement forces oil companies to borrow heavily. The petroleum ministry is piloting a biometric scheme for distribution of subsidized LPG. The 2012/13 budget looks to expand pilot programs, allowing eligible consumers to recoup LPG and kerosene subsidies via the Aadhaar platform (a 12-digit number which the Unique Identification Authority of India will issue for all residents in India). Government in Sep 2012 increased the price of diesel by Rs. 5 (US$0.09) a liter, steepest-ever once-time increase, and limited the number of subsidized LPG refills to six a year per household. The price of LPG outside the quota can be as high as triple the subsidized price."
 +
 +
(Source:  Kojima, Masami. (2013, forthcoming). “Petroleum product pricing and complementary policies:Experience of 65 developing countries since 2009.” Washington DC: World Bank.)
 
|Fuel Currency=INR
 
|Fuel Currency=INR
 
|Fuel Price Exchange Rate=45.479
 
|Fuel Price Exchange Rate=45.479
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|Fuel Price Composition=GIZ_IFP2012_India.png
 
|Fuel Price Composition=GIZ_IFP2012_India.png
 
|Fuel Price Composition Fuel Type=Gasoline 95 Octane
 
|Fuel Price Composition Fuel Type=Gasoline 95 Octane
−
|Fuel Price Composition Date=
 
 
|Fuel Price Composition Annotation=For an assumed price of 58.90 INR.
 
|Fuel Price Composition Annotation=For an assumed price of 58.90 INR.
  
Line 17: Line 25:
  
 
Source: http://www.kokkada.com/calculations-of-petrol-prices-in-india/ (→App. A3). Taxation on Diesel is considerably lower, resulting to overall lower pump prices.
 
Source: http://www.kokkada.com/calculations-of-petrol-prices-in-india/ (→App. A3). Taxation on Diesel is considerably lower, resulting to overall lower pump prices.
−
|Fuel Pricing Policies=The Ministry of Petroleum and Natural Gas supervises both the upstream and downstream fuel sectors in India (http://petroleum.nic.in/). While there is plenty of legal information on the ministries website, clear and easy-to-understand information regarding fuel price breakdowns and further pricing policies is missing. Annual reports offer detailed top-level-statistics and also fuel price timelines.
+
|Fuel Matrix Pricing Mechanism=2
−
 
 
−
The downstream market is open to private companies. The fuel price is regulated via maximum prices, which are set by the government / the ministry several times a year (depending on the degree of volatility of international crude oil prices). Prices are changed on an ad-hoc basis and in times of high crude oil prices OMCs are forced to sell at prices levels that do not cover the overall costs. This leads to temporary huge losses for oil companies that need to be outbalanced by the government. Thus, in fact fuels (especially diesel) are subsidized in India (→App. A1). Taxes on diesel are much lower than on gasoline.
 
−
 
 
−
Indian states impose different taxes on fuels. Also, every state imposes VAT independently.
 
−
 
 
−
The findings of latest reform effort are compiled in the report “Report of The Expert Group on A Viable and Sustainable System of Pricing of Petroleum Products”: http://petroleum.nic.in/reportprice.pdf , which contains a wealth of information.
 
 
|Fuel Matrix Price Level=2.5
 
|Fuel Matrix Price Level=2.5
−
|Fuel Matrix Pricing Mechanism=2
 
 
|Fuel Matrix Annotation=Clear information on fuel price breakdown and pricing formula missing.
 
|Fuel Matrix Annotation=Clear information on fuel price breakdown and pricing formula missing.
 
|Fuel Transparency Price Composition=2
 
|Fuel Transparency Price Composition=2
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|Fuel Price Factsheet Source Type=Other Information
 
|Fuel Price Factsheet Source Type=Other Information
 
|Fuel Price Factsheet Source Link=http://petroleum.nic.in/
 
|Fuel Price Factsheet Source Link=http://petroleum.nic.in/
−
|Fuel Price Factsheet Source Annotation=GSI: Lessons Learned from Attempts to Reform India's Kerosene Subsidy  
+
|Fuel Price Factsheet Source Annotation=GSI: Lessons Learned from Attempts to Reform India's Kerosene Subsidy
 
}}
 
}}
 
{{Fuel Price Factsheet Source
 
{{Fuel Price Factsheet Source

Revision as of 10:53, 18 February 2013

Part of: GIZ International Fuel Price database
Also see: India Energy Situation

Fuel Pricing Policies

Local Currency: INR
Exchange Rate: 45.479


(2010/11/17)

Last Update: 2011/05/01

The Ministry of Petroleum and Natural Gas supervises both the upstream and downstream fuel sectors in India (http://petroleum.nic.in/). While there is plenty of legal information on the ministries website, clear and easy-to-understand information regarding fuel price breakdowns and further pricing policies is missing. Annual reports offer detailed top-level-statistics and also fuel price timelines.

The downstream market is open to private companies. The fuel price is regulated via maximum prices, which are set by the government / the ministry several times a year (depending on the degree of volatility of international crude oil prices). Prices are changed on an ad-hoc basis and in times of high crude oil prices OMCs are forced to sell at prices levels that do not cover the overall costs. This leads to temporary huge losses for oil companies that need to be outbalanced by the government. Thus, in fact fuels (especially diesel) are subsidized in India (→App. A1). Taxes on diesel are much lower than on gasoline.

Indian states impose different taxes on fuels. Also, every state imposes VAT independently.

"Government heavily subsidizes the prices of LPG and kerosene for household use. Subsidized kerosene is rationed and distributed through the Public Distribution System, which also delivers subsidized food. Two separate government committees in 2006 and 2008 recommended moving away from subsidizing the kerosene price to cash transfer to the poor. In 2011, another proposal was made, shifting from a price subsidy to a monthly cash transfer of Rs. 300 (about US$6.50) delivered to women. As of 2010, there were 120 million LPG customers and 850 million cylinders in circulation. Government’s vision of covering 100% of population with gas has led to a target of adding another 50 million customers to increase coverage from 50% to 75%. The prices of non-branded diesel and at times non-branded gasoline have also been kept below market levels. Compensation for losses suffered by the three state-owned oil companies marketing subsidized fuels was Rs. 120,000 million (actual, US$2.5 billion) in fiscal 2009/10 (Apr–Mar), Rs. 350,000 million (actual, US$7.7 billion) in fiscal 2010/11, Rs. 650,000 million (revised budget, US$13.6 billion, up from Rs. 200,000 million originally budgeted) in fiscal 2011/12, and Rs. 400,000 million (original budget, US$7.7 billion as of Apr 2012) in fiscal 2012/13, apart from an additional US$0.6 billion set aside for LPG and kerosene in each fiscal year. In the first quarter of fiscal 2012/13, the three companies posted combined losses of Rs. 405 billion (US$7.5 billion) on fuel sales. Lack of timely reimbursement forces oil companies to borrow heavily. The petroleum ministry is piloting a biometric scheme for distribution of subsidized LPG. The 2012/13 budget looks to expand pilot programs, allowing eligible consumers to recoup LPG and kerosene subsidies via the Aadhaar platform (a 12-digit number which the Unique Identification Authority of India will issue for all residents in India). Government in Sep 2012 increased the price of diesel by Rs. 5 (US$0.09) a liter, steepest-ever once-time increase, and limited the number of subsidized LPG refills to six a year per household. The price of LPG outside the quota can be as high as triple the subsidized price."

(Source: Kojima, Masami. (2013, forthcoming). “Petroleum product pricing and complementary policies:Experience of 65 developing countries since 2009.” Washington DC: World Bank.)

Fuel Prices and Trends

Gasoline 95 Octane Diesel
in USD*

in Local Currency

* benchmark lines: green=US price; grey=price in Spain; red=price of Crude Oil



Fuel Price Composition

Price composition for one litre of Gasoline 95 Octane.


GIZ IFP2012 India.png


For an assumed price of 58.90 INR.

(*VAT differ among states and over time; 19% is an usual value; up to 28% for gasoline in some states.)

(**Transportation charge differs depending on actual transportation costs. 6 INR is an average value.)

(***includes: Education Tax (0.43INR), Crude Oil Custom Duty (1.1INR) and Petrol Custom Duty (1.54INR).)

Source: http://www.kokkada.com/calculations-of-petrol-prices-in-india/ (→App. A3). Taxation on Diesel is considerably lower, resulting to overall lower pump prices.



At a Glance

Regulation-Price-Matrix
Transparency of
Price Composition 		Transparency of Pricing
Mechanism / Monitoring
IFPDB matrix background.png
IFPDB matrix point.png
 IFPDB trafficlight yellow.png IFPDB trafficlight explanation.png IFPDB trafficlight yellow.png


Clear information on fuel price breakdown and pricing formula missing.


Sources to the Public

Type of Information Web-Link / Source
Other Information http://petroleum.nic.in/ (GSI: Lessons Learned from Attempts to Reform India's Kerosene Subsidy)
Other Information http://www.iisd.org/pdf/2010/lessons_india_kerosene_subsidy.pdf
Pump prices and margins http://www.iocl.com (Indian Oil; retailer)
Pump prices and margins http://petroleum.nic.in/petstat.pdf (Ministry report)


Contact

Please find more information on GIZ International Fuel Price Database and http://www.giz.de/fuelprices

This is a living document. If you have any comments or suggestions, please feel free to contact us: Armin.Wagner@giz.de









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