Q: When I create a virtual machine in Azure, do I pay for the operating system disk storage?
A: Yes. The price per minute for an Azure virtual machine covers the processor/memory usage, but the actual storage for the virtual machine operating system, which is a VHD file, is charged at regular Azure BLOB storage rates. You also pay for any additional data disks. You don't pay for the temporary disk (D, by default) because it's stored on local host storage as non-persistent storage. This is confirmed in the Microsoft Azure Virtual Machines Pricing Details.