Diesel Price in Bareilly
Diesel Price in Bareilly, one of the largest metropolis in the Indian state of Uttar Pradesh, is composed of various domestic and international factors. To know how diesel is priced in the city one must be aware of the diesel’s journey from crude form to retail outlets as well as the factors that affect diesel rate in Bareilly on a daily basis. Further, there is a new pricing mechanism in place called dynamic fuel pricing using which the diesel and other petroleum products in the country are being priced.
Let’s drill down into the topic to have a better idea about diesel price in Bareilly, how is it revised every day, why is diesel price high in the city compared to other Indian cities and states and all other questions you have in your mind.
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Daily Revision of Diesel Prices in Bareilly
Before the implementation of daily price revision, diesel prices in Bareilly were revised on a fortnightly basis. Two price revisions used to take place every month, once on the 1st and next on the 15th of the same month. The average price of the Indian crude basket in the previous 15 days was considered to revise the price. The fortnightly revision resulted in sharp increase or decline in diesel prices, creating dismay among oil companies, fuel dealers and even end consumers.
To avoid sharp fluctuation of diesel prices and to bring more transparency in the pricing mechanism, the Indian government announced dynamic fuel pricing for all fuels across the country, starting June 2017. Using the pricing mechanism, Indian oil marketing companies (OMCs) revise diesel rate on a daily basis. The price will be revised based on previous day’s crude oil price and currency exchange rate. Thus, thus any slight changes in the two components will be passed to the end consumer without any delay.
Diesel prices in Bareilly are hence being revised on a daily basis. The OMCs will revise the price every day based on previous day’s crude oil price and currency exchange rate. The revised diesel price will be updated at all the petrol stations across Bareilly by 6 a.m. every day. While the automated fuel stations get an auto update of the price, the non-automated stations revise the price manually.
How are Diesel Prices in Bareilly Calculated?
Diesel price in Bareilly or any other city in India is composed of various domestic and international components. While a few elements affect diesel price on a daily basis, other components, which are mostly domestic in nature, show some impact on the diesel price once in a while.
The components involved in diesel pricing in Bareilly include the cost of the crude oil, ocean freight charges, OMCs profit margins, state and central government taxes and dealers commission.
Crude oil price is the price at which Indian oil companies import crude oil from other countries. Once the crude is shipped to Indian ports across the ocean the transporter will levy ocean freight charges, which will be added to the cost of crude oil before it is sold to the petrol dealers.
The crude oil is then shipped to the oil refineries for further processing. The refined oil, which is in the form of diesel or petrol will then be shipped to respective retail outlets which have purchased the diesel.
Once the refined diesel reaches the fuel stations, the state and central government taxes will be added to the cost price of the fuel before it is sold in the petrol stations.
Hence, all these components starting from the cost price of crude oil, ocean freight charge, refining and transportation costs, marketing costs of OMCs, dealers commission to transport the fuel from refineries to petrol pumps and to maintain their retail outlets and finally the state and central governments, excise duty and value added tax (VAT) are the components that makeup diesel price in Bareilly.
Factors Affecting Diesel Prices in Bareilly
The primary factor that affects diesel price in Bareilly on a daily basis is the crude oil price in the global market. Crude oil price is volatile in nature and changes based on various factors including climatic conditions, bad weather, global demands, political moves and demand and supply metric in oil producing nations. If the crude oil price in the international market is high, diesel price in Bareilly will be high.
The second factor that affects diesel price on a daily basis is the currency exchange rate. If the value of Indian rupee declines against the US dollar, oil companies have to shell out more money to purchase crude. Thus the stronger the Indian rupee, the lesser will be the diesel price in India.
Other factors that may not affect diesel price on a daily basis are state and central taxes. Whenever there is a revision of tax rates, diesel price will get affected. Further, any changes in the OMC’s profit margins and petrol dealers commission would also impact diesel prices in the city.
Frequently asked questions (FAQs) on diesel price in Bareilly
- Who will control petrol pump prices in Bareilly?
- Why do diesel prices vary in different states?
- Why do diesel prices in Bareilly change every day?
Ever since petrol and diesel are deregulated in India, diesel prices in the country are being aligned to international crude oil prices. With regards to diesel prices at petrol pumps, they are under the control of respective fuel stations. The pump price is typically influenced by the cost of transporting fuel to petrol stations and the cost of running a fuel pump.
Of the different components that make-up diesel price, the state government value-added tax is one. Currently, the Uttar Pradesh government charges a value-added tax (VAT) of 16.99% per litre of diesel. The same tax rate is applied in Bareilly as it is a city in UP. Similarly, other states have different tax rates making diesel price different from one state to another and one city to another.
Not just in Bareilly, diesel prices across India vary on a daily basis because of the dynamic fuel pricing mechanism. The fuel pricing model makes diesel prices in the country align with the international crude oil prices and currency exchange rate. For instance, to calculate today’s diesel price in Bareilly, yesterday’s price of Indian crude oil basket and yesterday’s closing currency exchange rate will be considered.
Also Check Diesel Price in NearBy Cities of Bareilly
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