What it actually costs to get a litre of petrol or diesel from an oilfield to your tank, stage by stage, and who keeps the money at each step. The big lesson: the price of crude has little to do with what it costs to pump it out. Terms are explained in the glossary at the bottom. For pump-price history and what-if scenarios, see the separate Pump Price Anatomy page.
These numbers move fast. Crude prices, shipping rates, insurance and refining margins have been swinging week to week since the war began. Treat every figure here as a snapshot as of early October 2026, and check the latest before relying on it.
Pick a fuel and where its crude came from. Each bar is one step in the chain, colour-coded by who receives the money. The numbers use today's prices and the same assumptions as the Pump Price Anatomy dashboard.
Costs range from a few dollars a barrel in Saudi Arabia, where giant fields flow easily, to $60–70 for a new US shale well that must be drilled and fracked. Yet all of it sells at roughly the world price. The difference between cost and price is profit for the company and tax income for its government.
| Where | Cost per barrel | What it includes | Notes |
|---|
The Saudi operating cost (Aramco) and the US shale figure (a survey of US oil producers, Q1 2026) are reported figures. The other rows are indicative ranges from typical industry estimates, not 2026 data, so treat them as approximate. "Full-cycle" cost includes the investment needed to develop the field, not only the cost of running it. Saudi Arabia needs roughly $96 a barrel to balance its government budget, which is why low production cost does not mean it wants low prices.
India imports about 88% of its crude, mostly by sea from the Persian Gulf. Since the war began in late February, two costs have exploded: hiring a tanker, and insuring it against attack.
| Gulf to India, per barrel | Before the war | Mid-September 2026 |
|---|---|---|
| Tanker hire (supertanker, about 2 million barrels) | $1.45 | $8.40 |
| War-risk insurance on the ship (0.25% of ship value per voyage then; 1–10% now) | about $0.20 | $1–7 |
| Cargo insurance, delays and port costs | small | a little more |
| Total, typical cargo | $1.5–2 | $10–13 |
| Late September: Gulf–China supertanker earnings jumped to $1.29 million a day, from $678,000 a month earlier. At that rate Gulf–India works out to roughly $14–17 a barrel including insurance (my estimate) | – | $14–17 |
| Route | Days at sea | Shipping cost now | Who it affects |
|---|---|---|---|
| Persian Gulf to India, through Hormuz | about 5–7 each way | $10–17 | Most of India's crude |
| Saudi Red Sea port (Yanbu) to Asia, north through Suez and round Africa | about 48, against 19 normally | about $5 more than the normal route (August) | Saudi crude avoiding Hormuz and Bab el-Mandeb |
| US Gulf Coast (Houston) to Asia | about 40–50 | about $26 (21 Sep) | US crude that Asian buyers, India included, now buy to replace Gulf barrels |
The waterfall above uses about $15 for India. So $26 is real, but it is the cost on the longest route. India's average shipping cost is a blend, mostly the shorter Gulf route. Use the shipping slider above to try $26.
Tanker rates were quoted as $10.6 a tonne in February and $61.9 a tonne on 14 Sep; one tonne of crude is about 7.3 barrels. US refineries mostly receive crude by pipeline from US oilfields, typically for a few dollars a barrel, so they barely feel this.
A refinery heats crude and splits it into products by boiling point, then "cracks" heavy parts into lighter, more valuable fuels and strips out sulphur. Figures in (brackets) are per litre, converted at ₹95.4 per US dollar. One barrel always becomes several products at once, so there is no exact cost of "a litre of diesel". The refinery's costs are shared across everything it makes.
Gallons from one 42-gallon barrel of crude (159 litres). Output is slightly more than 42 gallons because the products are less dense than crude (the "processing gain").
Petrol (19–20 gallons) and diesel (11–13 gallons) are published US government ranges, shown here at their midpoints; the other figures are approximate. Indian refineries are set up to make more diesel: roughly 40% of their output is diesel and about 17% petrol, against roughly 27% diesel and 43% petrol in the US.
| Cost | $ a barrel (₹ a litre) |
|---|---|
| Energy: fuel gas, electricity and steam to heat and pump | 2.0–3.5 (₹1.2–2.1) |
| Hydrogen to remove sulphur (needed for clean diesel) | 0.5–1.0 (₹0.3–0.6) |
| Maintenance, including shutdowns for overhaul | 1.0–1.5 (₹0.6–0.9) |
| Staff | 0.7–1.2 (₹0.4–0.7) |
| Catalysts and chemicals | 0.3–0.6 (₹0.2–0.4) |
| Insurance, administration and other | 0.3–0.6 (₹0.2–0.4) |
| Running cost (cash) | about 5–8 (₹3.0–4.8) |
| Paying back the plant: depreciation and a return on a $10–15 billion investment | 3–5 (₹1.8–3.0) |
| Full cost | about 8–13 (₹4.8–7.8) |
Typical ranges for a large, complex refinery, from general industry benchmarks; not specific to any company. Crude is about 85% of a refinery's total spending; everything above is the other 15%.
| Measure | What it is | Today |
|---|---|---|
| Crack spread | Price of one product minus the price of crude. A market signal of how valuable that product is. | US diesel about $85 (₹51/L) over US crude in this model; the August average was $115.83 (₹70/L) over WTI, which is where "$110" headlines come from. US petrol about $45 (₹27/L). California refiners reported a petrol margin of $1.08 a gallon, or $45 a barrel (₹27/L), in July. |
| Gross refining margin (GRM) | Value of everything made from a barrel minus the cost of that barrel. What the refinery actually earns before its running costs. Lower than the diesel crack because leftovers such as fuel oil and petroleum coke sell below the price of crude. | Indian Oil: $15.59 a barrel (₹9.4/L) in April–June 2026, or about $36 (₹21.6/L) before India's new duty on fuel exports. Singapore benchmark: over $10 (₹6/L) (September). |
Refinery profit = gross refining margin − running cost − payback of the plant. With a $15.59 margin (₹9.4/L) and about $9 of total costs (₹5.4/L), Indian Oil's refineries clear roughly $6–7 a barrel (₹3.6–4.2/L).
After the refinery, fuel moves by pipeline, rail or truck to depots and pumps, and taxes are added.
| Item, per litre | Delhi petrol | Delhi diesel | US petrol | US diesel |
|---|---|---|---|---|
| Transport to depots and oil-company marketing | ₹1.8 | ₹1.8 | $0.17 | $0.38 |
| Pump owner's commission | ₹4.4 | ₹3.0 | ||
| Central excise duty (India) / federal tax (US) | ₹11.90 | ₹7.80 | $0.14 | $0.18 |
| State VAT (India) / state taxes (US) | 19.4% | 16.75% + ₹0.25 |
India: excise from the March 2026 cut; Delhi VAT rates; diesel commission from the published Delhi price build-up; petrol commission and the ₹1.8 transport and marketing figure are my estimates. US: distribution, marketing and tax per litre worked out by applying the official US May 2026 cost breakdown to the 28 Sep pump price; the US does not split distribution from retail in the same way.
Saudi crude costs under $10 a barrel to produce in full and sells for over $100. The price is set by the last barrel the world needs, today a shale well or a cargo that has to sail around Africa. Low-cost producers keep the difference.
Turning crude into diesel costs about $8–13 a barrel. The diesel margin today is far higher because damaged refineries in Russia and the Gulf left the world short. The extra is profit for whoever still has working refineries.
US diesel costs about ₹161 a litre against ₹95 in Delhi, a gap of about ₹66. Three things make up most of it: the US diesel refining margin, about ₹42 a litre higher ($85 a barrel against about $15 assumed for India); US distribution and retail costs and margins, about ₹31 higher; and the loss India's state oil companies absorb, about ₹14. Two things work the other way: India pays about ₹18 more for crude and shipping, and about ₹4 more in tax.