Diesel Price in Aligarh
Located in the Indian state of Uttar Pradesh, Aligarh is known for its lock industries and it’s also a prominent agricultural trade centre in the state. Closer to the national capital, the city has a thriving population and depends on diesel to commute between destinations.
Diesel prices in Aligarh are revised daily due to several factors which influence the change in the price. Fuel companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum operate more than 90% of fuel stations across the city.
With the daily revision in diesel prices, it’s essential to understand why fuel prices are updated daily and what influences the change in the fuel price. To understand the calculation of diesel prices in Aligarh and how fuel companies arrive at the computation of the Retail Selling Price (RSP) of diesel, let’s review each of these questions further below.
Factors Affecting Diesel Prices in Aligarh
India imports more than 70% of crude or unrefined oil from oil-producing countries making it an important and expensive commodity in India. While the global crude oil rate and the US dollar exchange rate are external factors, elements such as taxes, profit margin, operational costs and dealer commissions are internal factors which influence the revision in diesel prices. Let’s review the factors in detail to understand the concept of diesel pricing better.
- Global Crude Oil Price: Crude oil is a global commodity as it’s mostly found in certain countries. Oil-producing countries trade crude oil in the international market and emerging economies such as India and China largely depend on the global crude oil to aid its transportation requirement. The demand and supply of crude oil are not constant due to several reasons such as seasonal variations, currency exchange rate fluctuations, shortage in supply, production cuts and geopolitical tensions, which makes crude oil an essential commodity for India as well as other countries.
- Currency Exchange Rate: Trading of crude oil in the international market happens in US dollars. If the rate of the US dollar against the Indian rupee falls, the price of crude oil declines. If the US dollar appreciates against the rupee, the cost of crude oil rises.
- Excise Duty & Value Added Tax (VAT): The supply of diesel is taxed by the state and central governments. The tax levied on diesel by the Centre remains the same across the country, while VAT differs from state to state. If the tax rate changes, the diesel price in Aligarh and across cities in the country changes accordingly. Currently, diesel attracts excise duty of Rs.15.33 per litre, while Uttar Pradesh levies VAT at 16.99%.
- Profit Margin & Dealer Commission: Oil Marketing Companies (OMCs) purchase crude oil and transport it to be refined as diesel and sold across the country. OMCs retain their profit margin and other operational costs before diesel is sold at its final selling price. Also, commission to dealers (petrol pump owners) is added to the diesel price.
|Also Know: Diesel Price in Delhi|
What is the Frequency of Revising Diesel Prices in Aligarh?
All fuel stations in Aligarh have been revising diesel prices daily effective from 16 June 2017 based on the ‘Dynamic Fuel Pricing’ mechanism. Under this method, diesel prices will differ from day to day as fuel companies include the previous day’s crude oil rate and the currency exchange value. The dynamic fuel pricing mechanism ensures transparency in diesel pricing and enables fuel distributors to follow the best stock management practice.
Prior to the ‘Dynamic Fuel Pricing’ mechanism, fuel companies used to revise the diesel price every fortnight by including the preceding fortnight crude oil price and the exchange rate of the US dollar. However, this method had its drawbacks. A sudden spike in the global crude oil rate did not allow fuel companies to revise the diesel price immediately and had to wait a fortnight to update the fuel price, thereby incurring losses. Hence, the fortnightly method of revising diesel prices was stopped and the dynamic fuel pricing mechanism was introduced.
How are Diesel Prices in Aligarh Calculated?
Now that we understand the factors that affect the diesel price and when fuel companies revise fuel prices, let’s break down the diesel price recorded on 3 June 2018 in Aligarh.
|1||Crude Oil Price + Freight Charges||$78.30 per barrel = Rs.32.98/Litre (considering $1=66.96 and 1 barrel oil = 159 litres)|
|2||Profit margin, transportation, refining, and other operational costs||Rs.8.10/Ltr|
|3||Excise Duty + Road Cess||Rs.15.33/Ltr|
|4||Commission to dealers||Rs.2.53/Ltr|
|5||Value Added Tax (VAT) + 25p Pollution Cess with surcharge||Rs.10.26/Ltr|
|Total||Retail selling price of diesel in Aligarh||Rs.69.21/Ltr|
How to get Today’s Diesel Price in Aligarh?
With diesel prices revised on a daily basis, fuel companies have introduced several methods to track the current diesel price in Aligarh and across other cities.
- Mobile Apps: Customers can take advantage of mobile apps launched by respective oil companies. IOC customers can download the ‘Fuel@IOC’ app, BPCL consumers can utilise the ‘SmartDrive’ app, while HPCL customers can use the ‘MY HPCL’ app to get the latest diesel price in a city.
SMS: Customers can send SMS in the format below to get the current fuel prices in a city.
- IOC: Type RSP
Dealer code and send the SMS to 9224992249.
- BPCL: Type RSP
Dealer code and send the SMS to 9223112222.
- HPCL: Type HPPRICE
Dealer code and send the SMS to 9222201122.
- IOC: Type RSP
- Oil Company’s Website: The current diesel price in a city is updated daily on the respective oil company’s website.
How does GST Impact the Diesel Price in Aligarh?
The Goods and Service Tax (GST) now replaces all forms of indirect tax on supply of goods and services in the country. However, petroleum products such as diesel and petrol have been exempted from the GST. This is because the current tax (excise duty and VAT) rate is higher compared to the highest tax slab under the GST. Therefore, by imposing GST on diesel would reduce the revenue to the State and the Centre. If GST is imposed on diesel with the current tax slabs, the cost to purchase a litre of diesel will significantly reduce.
Diesel Price Vs. Petrol Price in Aligarh
Compared to the petrol price, diesel is cheaper as taxes and operational costs differ between the two fuels. While the excise duty on diesel is Rs.15.33 per litre, petrol is imposed Rs.19.48. As for the local sales tax or VAT, diesel in Aligarh attracts 16.99% and petrol is charged at 28.68%. Since diesel is used extensively by commercial and public transportation vehicles, taxes on diesel is relatively lower than of petrol.
*Disclaimer: BankBazaar makes no guarantee or warranty on the accuracy of the data provided on this page, the prevailing prices are susceptible to change and provided on an as-is basis. We accept no liability for any loss arising from the use of the data contained on this website.