Diesel Price/Rate in Bhopal Today

Bhopal is not only the capital city but also the second biggest metropolis in Madhya Pradesh. Earlier, due to the Bhopal Gas Tragedy, the economic development was stalled. But the industrial growth has started to thrive in the recent years.

Overall, the economy is entirely based on its industries and is in fact, a vital industrial region of the state. Chemicals, cotton, flour milling, and electrical goods are the primary sources of their economy. With about 80% of urban population, it is highly urbanized and now a "metro" city and that's why many IT businesses have set up their offices there.

Factors That Affect Diesel Price In Bhopal

On an average, diesel is much cheaper when compared to other gasoline but the differences vary considerably in almost all the countries over time. Just like petrol, even diesel is obtained from crude oil. Therefore, the cost of the crude oil is an important factor in influencing the diesel rates in a country.

Nevertheless, diesel price also reflects taxes, refining, marketing, and distribution costs. In addition, the retail prices of diesel are also affected by the market demand. The important factors that affect a region's diesel price are listed below:

1. Refining Cost

During the refining process, crude oil is divided into various components, which are then converted through additional treatments into diesel fuel, gasoline, and petroleum products. Talking but diesel in specific, it is less volatile and heavier than gasoline. This is exactly why diesel is easier to extract from crude oil. Consequently, diesel is cheaper than other gasoline products in different countries in the world. But when ULSD (Ultra-Low Sulfur Diesel) was introduced between the year 2006 and 2010, the cost to produce diesel substantially increased, as this mechanism requires further refining.

2. Tax

The tax levied on gasoline and diesel varies from one country to the other. Say, for instance, if the United States Federal levies a tax of 18 cents per gallon for diesel, the European nations will impose more lightly. Since tax is one of the primary elements for the diesel's end price, only tax policies determine the cross-country gaps in diesel and gasoline prices largely.

3. Demand

A fuel like diesel not only helps in powering up the cars but also various types of vehicles that are used for public transportation. These usually include huge delivery trucks, heavy-duty vans, off-road vehicles, generators, machinery, boats, etc. During economic expansion periods, the demand from the industrial sectors increase significantly, and that's the reason diesel rates exceed other gasoline prices. Keep in mind that the greater the demand for diesel, the higher the price.

4. Seasonality

The fuel that is utilized for home heating include the same components that are manufactured for diesel. Therefore, as a result, diesel price is also affected by the demand for heating oil. It is particularly in winters that the demands for heating oil rise, which also inclines the retail price of diesel.

What Is Dynamic Fuel Pricing?

On June 16, 2017, the OMCs (Oil Marketing Companies) of the public sector initiated the system of "dynamic fuel pricing" to revise the fuel prices on a daily basis based on the market trends and several other factors.

Before this system was implemented, the petrol and diesel rates were updated on the first and sixteenth day of every month. That's why it was called "fortnight fuel pricing." However, it had a lot of drawbacks and to overcome them, the mechanism of dynamic pricing was initiated.

According to the dynamic system, the state-owned oil firms change the prices every morning at 6:00 a.m. IST (Indian Standard Time) based on two important factors:

1. CER - Currency Exchange Rate
2. IMR - International Market Rate

How To Check The Diesel Price Without Going To The Fuel Pump?

A customer can get access to the everyday updated price of both diesel and petrol for every city by downloading and installing a mobile application like Fuel@IOC, which is developed by Indian Oil Corporation.

However, if a customer doesn't have a smartphone, then there is an option of SMS too. The diesel price can be checked or tracked by sending the following format to the number: 9224992249

SMS Format: RSP DEALER CODE

Note: Every petrol pump displays its dealer code on its premise.

How has Diesel Price Moved After Implementing Dynamic System In Bhopal?

The industry insiders state that the fuel prices are determined by not only the movement of international crude oil prices but also the market's demand-supply situation and dollar/rupee exchange rate.

Even though a shortage of the product causes an incline in its cost, an increased supply leads to a declination. In the initial weeks of its implementation (that is from June 16 to June 22), the international crude oil prices for the Indian market plummeted by 2.5% and the diesel price dropped by 1%.

Does GST Affect The Diesel Rates In Bhopal?

No, GST doesn't have any influence on the diesel rates in Bhopal. Including GST for diesel or any other fuel is a long process and requires efforts from the government as well as the oil marketing companies.