You are paying more than 100% tax on oil prices

Oil companies supply oil to Indian government at the rate of Rs 29.54 per litre (inclusive of their marketing charges). However, what customers have to pay includes taxes, duties, central excise duty, state VAT, octroi, cess and commission for petrol pump owners, which together could go up to 153 % in taxes.

As per a senior economist who works closely with the government, the government is in the process of boosting its revenues by hiking the cess it charges on petrol.

Also read: Global diesel prices might force India to deal with private refiners

The government has its debt level crossed a virtually unsustainable Rs 4.13 lakh crore, and can’t increase borrowings in order to fund additional expenditure, leading to extra duties and cess on products that come under its ambit.

"Government should say it wants to discourage private transport and that they will use this extra money generated to strengthen public transport. Of course, this price hike will also affect those who car-pool everyday," Transport expert Ashok Datar told ET.

Also read: Wholesale prices saw 5.7% y-o-y growth in March