Diesel Price in Bhilai
The city of Bhilai is located in the State of Chhattisgarh and is popular for its steel and chemical industry. Established in association with the erstwhile Soviet Union, the Bhilai Steel Plant is the first Indian Plant to manufacture steel rails in the country. Despite being a relatively a new city in the country, the population have grown by nearly 77% between 1991-2001.
With the rapid increase in the population, vehicular density has inclined as well. While public transportation through buses remains one of the biggest forms of commuting between destinations, private vehicles such as two-wheelers and four-wheelers have been increasingly utilised.
Diesel is extensively used for public transport and for commercial operations. The diesel price in Bhilai is dynamic in nature and is revised on a daily basis. The revision in diesel prices is attributed to several components which are affected by international and domestic factors.
|Also Know: Diesel Price in Jharkhand|
Factors which Influence the Revision in Diesel Prices in Bhilai
Diesel is purchased in its crude form from oil-producing countries, which is then refined and supplied to fuel stations across the nation. India imports more than 70% of crude oil making it an essential and expensive commodity. Components such as crude oil prices and the currency exchange rate are international factors, while taxes, profit margin, operational costs and commission to dealers are the domestic factors.
Let’s Review Each of these Factors to Understand the Concept of Diesel Pricing Better.
- Global Crude Oil Price: The crude oil price is the primary component in determining the diesel price in a city. Crude oil prices are constantly changing due to several elements such as seasonal variations, demand and supply, output by oil-producing countries and geopolitical tensions. An incline in the crude oil rate increases the diesel price in Bhilai or other cities in the country. Since India depends on oil-producing countries for its crude oil requirement, any fluctuations in the rate affect the cost to purchase a litre of diesel.
- Currency Exchange Rate: Crude oil is purchased in US dollars in the international market. A rise in the USD value over the Indian Rupee increases the cost to buy crude oil or vice versa. Hence, fluctuations in currency exchange rate are one of the international factors which influence the diesel price in Bhilai.
- Taxes on Diesel in Bhilai: Supply of diesel in Bhilai attracts the Centre’s excise duty and the State’s sales tax or Value Added Tax (VAT). Currently, the Centre imposes excise duty of Rs.15.33 per litre on diesel, while the state of Chhattisgarh levies VAT at 25.81%. Taxes on diesel is the biggest component in the diesel price computation. A revision in taxes impacts the price of diesel in Bhilai.
- Oil Company’s Profit Margin & Commission to Dealers: Oil companies purchase crude oil from oil-producing countries and then it’s refined and supplied to fuel stations across the nation. A profit margin is included in the diesel price before it’s sold to the end consumer. Additionally, oil companies fix the dealer (petrol pump owners) commission to the diesel price as well.
Why Diesel Prices in Bhilai change Daily?
Prior to 16 June 2017, diesel prices were revised every fortnight by including the average rate of crude oil and the currency exchange value of the preceding fortnight. However, under this pricing mechanism, oil companies were not able to pass on a sudden increase or decrease in crude oil price to consumers immediately and had to wait a fortnight to revise the diesel price.
Currently, diesel prices are revised under the ‘Dynamic Fuel Pricing’ mechanism. In this method, diesel prices are revised daily by including the preceding day’s crude oil rate and the US dollar exchange value. Under this method, oil companies and consumers benefit from the latest crude oil price. Hence, an incline in the crude oil rate or a reduction is immediately passed on to the customer.
Advantages & Disadvantages of Dynamic Fuel Pricing Mechanism
With diesel prices being revised daily, let’s evaluate the pros and cons of the dynamic fuel pricing mechanism to understand the concept better.
- Consumers can take advantage of a low crude oil price the next day.
- Oil companies are able to forecast their revenues and losses effectively.
- A sudden increase or decrease in crude oil price is passed on to the customer. Besides, oil companies do not incur losses while consumers can enjoy the benefit immediately and not wait a fortnight.
- Even the slightest fluctuations in the crude oil rate are passed on the consumers without losing out for an entire fortnight.
Ways to Track the Current Diesel Price in Bhilai
With diesel prices revised daily in Bhilai, fuel companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum have introduced several ways to track the current diesel price in a city. The methods below will track the latest fuel price in Bhilai and across other cities.
- Via Oil Company’s Mobile Apps: With smartphones being extensively used, consumers can track today’s diesel price in Bhilai through Indian Oil’s app ‘Fuel@IOC’. For Bharat Petroleum customers, the company has launched the ‘SmartDrive’ app, while customers using Hindustan Petroleum fuel stations can track the current diesel price by the ‘MY HPCL’ app.
Via SMS Service: Diesel consumers can send SMS to retrieve the latest diesel price in a city by following the process below.
Indian Oil: SMS RSP
Dealer Code and send it to 9224992249.
Hindustan Petroleum: SMS HPPRICE
Dealer Code and send it to 9222201122.
Bharat Petroleum: SMS RSP
Dealer Code and send it to 9223112222.
- Indian Oil: SMS RSP
- Via Online Portals: Oil companies update their respective website with the latest diesel and petrol price in a city. Consumers can visit the oil company’s website to get the current diesel price of Bhilai.
Computation of the Diesel Price in Bhilai
Here’s the breakdown of the diesel price in Bhilai recorded on 3 June 2018 which is an insight into how fuel companies calculate the diesel price under the dynamic fuel pricing mechanism.
|1||Crude Oil Rate + 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.15.46/Ltr|
|Total||Retail selling price of diesel in Bhilai||Rs.74.40/Ltr|
How does GST Impact the Diesel Price in Bhilai?
India moved to a unified tax regime from 1 July 2017 known as the Goods and Service Tax (GST). The supply of goods and services in India attract GST; however, diesel and petrol are exempted from the new taxation method. With the Centre’s excise duty and the State’s VAT on diesel, the revenue generated by the government is high which helps in maintaining the country’s fiscal discipline.
By bringing fuel under the GST, it would affect the revenue as the highest tax slab in the GST is lower compared to the taxes currently levied on diesel or petrol. Hence, GST is currently not applicable to diesel or petrol in India. If diesel is brought under the current tax slab of GST, the cost for a litre of diesel will reduce substantially.
*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.