Diesel Price in Bellary
Bellary or Ballari boasts of a rich heritage and has an abundant source of minerals which includes both metallic and non-metallic. Bellary is located in the Indian state of Karnataka and is surrounded by several iron and steel plants. Diesel is an essential commodity in Bellary as it’s extensively utilised by the public transportation as well as for commercial operations.
Similar to other cities in the country, diesel prices in Bellary is dynamic and changes due to several factors which are external and internal in nature. More than 90% of fuel stations are operated by State-owned Oil Marketing Companies (OMCs) such as Indian Oil, Hindustan Petroleum and Bharat Petroleum.
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Introduction to Dynamic Fuel Pricing Mechanism
As mentioned, fuel prices in Bellary are dynamic in nature and are revised on a daily basis. The government of India introduced the new ‘dynamic fuel pricing’ mechanism on 16 July 2017 to address several drawbacks of the previous mechanism of fortnightly revision.
Under the fortnight revision methodology, fuel companies revised diesel prices in Bellary on the 1st and the 16th of every month by including the preceding fortnight’s average crude oil rate and the US dollar exchange value. However, this led to losses incurred by oil companies as they weren’t able to pass on a sudden incline or decline in the global crude oil price to customers immediately.
In the dynamic fuel pricing mechanism, the diesel price in Bellary is revised daily at 6 a.m. IST by including the preceding day’s crude oil rate and the currency conversion rate. Under this pricing method, oil companies are able to pass on any benefit or increase in the crude oil price to the customer next day itself.
Influencers of the Diesel Price in Bellary
Diesel is purchased in its crude form in the international market by trading in US dollars. India imports more than 70% of crude oil from oil-producing countries. Since India depends on oil-producing countries to supply fuel to the country, diesel has become an expensive commodity. The analysis below offers insight into the factors which influence the diesel price in a city like Bellary.
- Global Crude Oil Rate: Crude oil is abundantly available in certain countries and the demand is substantially high. Therefore, an increase or decrease in the output affects the price of crude oil in the global market. Also, if there’s an instance of a shortage in supply or geopolitical tension, crude oil prices inclines. Hence, the cost to purchase a litre of diesel in Bellary or other cities in the country is primarily influenced by the change in global crude oil prices.
- US Dollar Exchange Value: Trading of crude oil typically happens in US dollars. The US dollar is constantly changing due to several factors. Hence, the cost to purchase crude oil either rises or falls thereby affecting the crude oil price. When the dollar appreciates over Rupee, the crude oil price increases, likewise, if the dollar depreciates over the Indian rupee, then the crude oil price increases and thereby increasing the diesel price in the country.
- Taxes on Diesel in Bellary: Taxes form the biggest component in the diesel price. Diesel attracts taxes levied by both the Centre and the State. While the government of India levies Rs.15.33 per litre as excise duty, the states charge the Value Added Tax (VAT) - Karnataka implies VAT on diesel at 18.25% for a litre of diesel. Hence, a change in the taxation value impacts the diesel price in Bellary.
- Fuel Companies’ Profit Margin & Commission to Dealers: Fuel companies transport crude oil from oil-producing countries which are then refined and sold as diesel in the country. These companies levy their profit margin and the dealer commission - which is the commission to fuel station owners - to the diesel price. A revision in these charges influences the price of diesel in Bellary.
How to find the Current Diesel Price in Bellary?
Since diesel prices are revised on a daily basis, prices differ every day. To ease the process to track the current diesel price, oil companies have launched several methods to track the latest diesel price in Bellary. Customers can take advantage of mobile apps, SMS service or consumers can visit the oil company’s website to track the current diesel price.
- Via Mobile Apps: Indian Oil has introduced the ‘Fuel@IOC’ app, Bharat Petroleum has the ‘SmartDrive’ app, while Hindustan Petroleum has launched the ‘MY HPCL’ app to track the current fuel price in a city.
Via SMS Service: Consumers can send SMS to retrieve the current diesel price of a particular fuel station. The process below will let find the current fuel price.
- IOC: RSP
Dealer Code to 9224992249.
- BPCL: RSP
Dealer Code to 9223112222.
- HPCL: HPPRICE
Dealer Code to 9222201122.
- IOC: RSP
- Online Portal: As mentioned, consumers can visit the respective oil company’s website to get the latest diesel price.
Computation of the Diesel Price in Bellary
To understand the dynamic fuel pricing mechanism better, let’s take an example of the diesel price recorded on 3 June 2018.
|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.10.76/Ltr|
|Total||Retail selling price of diesel in Bellary||Rs.69.70/Ltr|
GST on Diesel in Bellary
All goods and services rendered in the country come under the new Goods and Service Tax (GST); however, petroleum product such as diesel is exempted from the GST. With the current taxes such as the excise duty and VAT levied on the sale of diesel, the Centre and the states earn huge revenues when compared to the peak rate of GST which is 28%. Hence, diesel does not attract GST, currently.
That said, if the Centre decides to bring diesel under the current framework of the GST, the Retail Selling Price (RSP) of diesel will considerably reduce and lessen the burden of the common man.
Also Check Diesel Price in NearBy Cities of Bellary
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*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.