Cost of Gas is less than water

Cost of a gallen of gas or diesel is less than the price of the bottle of packaged water that you buy from the same gas station. Typically a litter of water cost you about $1 to $1.25 and gas price is $1.35 to $1.9 per gallon. So it is seen that water cost 50 to 100% more than gas.

Here's how the arithmetic goes: A barrel of crude oil contains about 190 litres. At $38 a barrel, the current price in the international market, each litre of crude works out to Rs 10, taking the exchange rate at Rs 50 to a dollar.

On an average, approximately 28-29 litres of petrol and 85 litres of diesel are refined from each barrel of crude. Admittedly, this figure can vary according to the type of crude being processed and the technology deployed in a refinery. So how much would the price of a litre of motor fuel be after incurring the cost of refining, if there were no other charges?

These calculations are admittedly simplistic and do not take into account other products such as kerosene, jet fuel, cooking gas, naphtha, etc., that are produced along with petrol and diesel and have a bearing on the final cost of each product. However, there won't be big difference between these figures and the figures worked out by the industry.