Have you wondered why the the financials of Oil Marketing Companies show profit -
The government and Oil Marketing Companies have taken a great initiative by disclosing the pricing of Petroleum products.
I give below the Price Build up of Petroleum Products
Price Build-up of Diesel at Delhi
|
Sr. No.
|
Elements
|
Unit
|
Effective 16th Dec'11
|
1*
|
FOB Price at Arab Gulf of
Gasoil (Diesel)BS III equivalent
|
$/bbl
|
127.41
|
2*
|
Add: Ocean Freight from AG to
Indian Ports
|
$/bbl
|
1.69
|
3
|
C&F (Cost & Freight)
Price
|
$/bbl
|
129.10
|
OR
|
Rs./Litre
|
41.69
|
4*
|
Import Charges
(Insurance/Ocean Loss/ LC Charge/Port Dues)
|
Rs./Litre
|
0.39
|
5*
|
Customs Duty @2.58% (2.50% +
3% Education cess)
|
Rs./Litre
|
1.09
|
6*
|
Import Parity Price (at 29.5º
C) (Sum of 3 to 5)
|
Rs./Litre
|
43.17
|
7*
|
Export Parity Price (at 29.5º
C)
|
Rs./Litre
|
41.15
|
8*
|
Trade Parity Price (80% of (6)+20% of (7))
|
Rs./Litre
|
42.77
|
9*
|
Refinery Transfer Price
(RTP) for BS-III Diesel (Price Paid
by the Oil Marketing Companies to Refineries)
|
Rs./Litre
|
42.77
|
10
|
Add: Premium recovered for
BS-IV Grade over BS-III
|
Rs./Litre
|
0.04
|
11*
|
Add : Inland Freight and
Delivery Charges
|
Rs./Litre
|
0.73
|
12*
|
Add : Marketing Cost of OMCs
|
Rs./Litre
|
0.65
|
13*
|
Add : Marketing Margin of
OMCs
|
Rs./Litre
|
0.80
|
14
|
Total Desired Price (Sum of 9 to 13)-Before Excise Duty, VAT and Dealer
Commission
|
Rs./Litre
|
44.99
|
15*
|
Less: Under-recovery to Oil
Marketing Companies
|
Rs./Litre
|
11.51
|
16
|
Price Charged to Dealers
(Depot Price) (14-15)- Excluding
Excise Duty & VAT
|
Rs./Litre
|
33.47
|
17*
|
Add : Specific Excise Duty @
Rs.2.06/Litre (Rs.2.00/Litre+ 3% Education cess)
|
Rs./Litre
|
2.06
|
18*
|
Add : Dealer Commission
|
Rs./Litre
|
0.91
|
19*
|
Add : VAT (including VAT on
Dealer Commission) applicable for Delhi @ 12.50% and Air Ambience Charges @
Rs.250/KL less rebate of Rs.375/KL.
|
Rs./Litre
|
4.46
|
20
|
Retail Selling Price at
Delhi (Sum of 16 to 19)
|
Rs./Litre
|
40.91
|
*The
explanatory notes are given in the attachment
|
**Fortnightly
RTP is weighted average of all Indian Pricing Ports.
Element wise explanation
of Price Build up of Diesel
|
Sr. No.
|
Elements
|
Description
|
1
|
FOB Price
|
FOB (Free on Board) daily
quotes of Gasoline at Arab Gulf including premium /discount published by
Platts and Argus publications are averaged for previous fortnight.
|
2
|
Ocean Freight
|
Ocean freight from Arab Gulf
to destination Indian ports as per World Scale freight rate adjusted for
AFRA.
|
4
|
Import Charges
|
Insurance charges, Ocean
Loss, LC Charges & Port dues applicable on import of product.
|
5
|
Customs Duty
|
Customs duty on diesel is
2.50% + 3% Education cess.
|
6
|
Import Parity Price (IPP)
|
IPP represents the price that
importers would pay in case of actual import of Diesel at the respective
Indian ports.
|
7
|
Export Parity Price (EPP)
|
EPP represents the price
which oil companies would realize on export of diesel i.e. FOB price of
product (serial no.1) plus Advance License benefit (ALB) (for duty free
import of crude oil pursuant to export of refined products). Consequent to
abolition of Customs Duty of Crude oil effective 25.06.2011, the ALB is
currently NIL.
|
8
|
Trade Parity Price (TPP)
|
Trade Parity Price is 80% of
IPP & 20% of EPP effective 16.6.2006 as per recommendations of Rangarajan
Committee Report.
|
9
|
Refinery Transfer Price (RTP)
|
RTP based on Trade Parity
Price is the price paid by the Oil Marketing Companies to domestic refineries
for purchase of diesel at refinery gate.
|
11
|
Inland Freight & Delivery
charges
|
It comprises of average
freight from ports to inland locations and delivery charges up to Retail
Outlet.
|
12
|
Marketing Cost
|
Marketing Cost & Margin
is as per Marketing Cost Study Report, Nov. 2006 by Cost Accounts Branch,MoF.
|
13
|
Marketing Margin
|
15
|
Under recovery to OMCs
|
Difference between Desired
Price and Actual selling price (excluding Excise Duty, VAT and dealer
commission), represents under-recoveries to OMCs.
|
17
|
Excise Duty
|
Excise duty on diesel is Rs.
2.00/ Litre as Road Cess + Education Cess @ 3%.
|
18
|
Dealer Commission
|
Dealer commission on diesel
is Rs.912/KL (effective 01-July-2011) as fixed by MoP&NG.
|
19
|
VAT (Sales Tax)
|
VAT at applicable rate in
respective State. It varies from state to state. Currently in Delhi, State
Taxes on Diesel is VAT @ 12.50% + Air Ambience charges Rs.250/KL less Rebate
of Rs.375/KL.
|
|
|
|
|
|
|
|
Source:
http://ppac.org.in/uniquepage.asp?id_pk=69 Please visit this link for details about pricing details of other petroleum products.