Diesel Price In Chennai Today

Diesel Price in Chennai

Chennai is the capital city of Tamil Nadu, known for its educational institutes, economic and cultural centres. Chennai is a rapidly growing city and is one of the most populous urban cities in India. Fuel prices in Chennai are revised daily by State-owned Oil Marketing Companies (OMCs), which is aligned with the international crude oil price. This means the diesel price in Chennai will either increase or decrease when the global crude oil price either increases or decreases, also, the exchange rate of rupee-dollar.

Diesel prices in Chennai used to be revised every two weeks or 15 days; however, under the new ‘Dynamic Fuel Pricing’ mechanism, diesel prices are revised every day. With prices changing every day, it’s important to check the diesel price in Chennai as any decline in cost could save you money.

Oil companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum fix the diesel price in Chennai proportional with any changes in crude oil rates in the global market.

What is Dynamic Fuel Pricing?

Fuel prices in India are computed daily under the ‘Dynamic Fuel Pricing’ mechanism, which considers the 15-day average price of crude oil and the rupee-dollar exchange rate. Oil companies arrive at the final selling price of fuel based on this calculation. The new diesel price in Chennai is effective from 6:00 am IST.

By revising diesel prices proportional to the crude oil price in the global market, oil firms are able to offset any losses and pass on any benefit to the consumer. Prior to this pricing mechanism, diesel and petrol prices used to be revised every fortnight, which was effective until 15 June 2017.

Under the old method, the fortnightly revision often led to a sudden rise or fall in fuel prices, sometimes burning a hole of the common man. To avoid any sudden leap in prices and burden on consumers, the daily dynamic fuel pricing method was introduced.

Factors Affecting Diesel Prices in Chennai

Diesel rates in Chennai include several components apart from primary factors such as crude oil price and the rupee exchange rate against the U.S. dollar. Oil companies include entry tax, freight charges, refinery charges, oil firm’s margin and logistics before fixing the final selling price of diesel in a city. Dealer commission, excise duty charged by the Union Government and the VAT or local sales tax charged by the respective State are later included to the basic cost of fuel.

While the other charges remain constant most of the time, the primary factors of crude oil price and the exchange rate of rupee-dollar have the highest impact on diesel prices in the country. Let’s understand why crude oil prices fluctuate and how it affects the fuel price in India.

• Supply and Demand: The biggest suppliers of crude oil in the global market has been the Organisation of Petroleum Exporting Countries (OPEC) and its strong allies, thereby influencing the price of crude oil in the market to a large extent. OPEC’s policies are driven by geopolitical developments in the region. Hence, any pressure on any of the OPEC member countries often leads to a shortage in supply of crude oil, which raises the crude oil price in the international market. Likewise, if there’s an increase in demand from other countries, oil prices tend to incline.
• Geopolitical: Any crisis or natural disasters often influence the crude oil price in the market as it could lead to a shortage or an increase in demand for oil. Political upheaval or tensions in the oil-producing or oil-consuming nations, there’s a huge impact on the prices of crude oil.
• Supply of Crude Oil in the Future: The biggest oil-producing and oil-consuming nations stock up huge reserves of crude oil to keep their economy healthy in the event of a price increase of crude oil. They stock up when oil prices are lower and supply it across the economy to keep prices stable.

Diesel Price Calculation in Chennai

Now that we understand the factors influencing the fuel price in the country, here’s how diesel price is calculated before it’s sold in the city. Below is the breakup of the diesel price in Chennai recorded on 3 January 2019.

Quarterly Diesel Price Trend in Chennai Between October and December 2018

Diesel Price Trend in Chennai Between October and December 2018

• Diesel was priced at Rs.79.48 per litre on 1 October based on the ‘Dynamic Fuel Pricing’ mechanism which considers the global crude oil price and the exchange rate of the rupee and the US dollar.
• State-run oil companies revise fuel prices daily. Prices of diesel in Chennai in October continued to incline to touch record highs on the back of high crude oil prices.
• With high fuel prices, the Centre announced a reduction of excise duty of Rs.1.50 per litre and oil companies further subsidised Rs.1 per litre offering some respite to consumers.

• This reduction led to the lowest rate recorded for the month at Rs.77.16 per litre on 5 October before it rose to touch Rs.80.10 per litre on 17 October as crude oil prices touched a four-year high.
• By the end of the month, the trend in diesel prices in Chennai dropped by 1.80% because of the decline in excise duty levied on fuel in the country.
• On 1 November, the diesel price stood at Rs.78.05 per litre – the highest price recorded for the month in Chennai.
• Diesel prices in Chennai dropped over the month as crude oil prices slightly declined on the back of decline in geopolitical tensions between the US and China.
• On 30 November, diesel recorded lowest price for the month when a litre of the fuel was available in Chennai at Rs.71.60 per litre.

• The diesel price trend in Chennai in November fell sharply by 8.27% influenced by the significant drop in crude oil prices in the international market.
• The diesel rate in Chennai on 1 December stood at Rs.71.19 per litre, which was the highest rate recorded for the month.
• The global crude oil was trading around $80 per barrel early October but fell to nearly $55 per barrel late December which prompted fuel prices in the India to drop sharply.
• On 31 December, diesel was available at its lowest for the month when it was sold at Rs.66.31 per litre.
• By the end of the month, diesel had declined by 6.86% mainly due to the sharp fall in crude oil price along with the appreciation of the rupee over the US dollar.

Diesel Price Trend in Chennai between July and September 2018

Diesel Price Trend in Chennai in July 2018

• In Chennai, the revision of the rate of diesel per litre occurred on a daily basis throughout the month of July 2018.
• The USD/INR exchange rate and the price of unrefined oil have a direct influence on the pricing of diesel as crude oil is an international commodity.
• Diesel rate in the city of Chennai raised by 32 paise litre in the first week of July 2018 and by one rupee per litre in the next week because of the strengthened dollar.
• Triggered by the declining oil rates in the 3rd week, the fuel price lessened marginally at all the diesel stations in the city.
• In most cases, the highest fuel rate is observed towards the end of the month. For this month, the highest rate was noticed on the 16th since fuel prices in the city of Chennai diminished in the week 3.
• In July 2018, diesel rate in the city of Chennai were accelerated by just 0.75% under the system of dynamic fuel pricing. A rise in the fuel rate caused exclusively by the depreciated INR.
• Diesel was taxed at 28% by the State Government of Tamil Nadu and the excise duty of Rs.15.33 was imposed by the Centre this month.

Diesel Rate Trend in Chennai in August 2018

• As of 1 August 2018, the commodity was priced at Rs.71.78 per litre. The price raised to Rs.71.87 on the 3rd and Rs.72.32 a litre on the 6th.
• The commodity was valued at Rs.72.39 on the 7th. The same price tag was extended until the 16th by the fuel marketing corporations, including HPCL, BPCL and IOCL.
• In the first two weeks, the cost of unrefined oil declined by $2.5 per barrel. As a result, diesel prices in Chennai were stagnant on all the seven days of the second week and the first two days of the third week.
• The price of diesel a litre was also steady at Rs.72.77 between 17 August and 19 August and Rs.73.04 a litre between 21 August and 23 August.
• On 28 August, the price stood at Rs.73.59 a litre. The OMCs further hiked the price to Rs.73.74 a litre on the 29th, Rs.73.93 a litre on the 30th and Rs.74.23 a litre on the 31st.
• The growth rate stood at 3.41% in this month only because of the appreciation of the dollar against the rupee. No domestic elements impacted the pricing of diesel in Chennai in August.

Diesel Price Trend in Chennai in September 2018

• The poor performance of the rupee triggered a hike in diesel prices in the first seven days of September 2018 in Chennai. The price as of 1 September was Rs.74.46 a litre. It ascended to Rs.76.17 per litre on the 7th.
• The Congress Party demanded the Central Government to reduce the excise duty on diesel and petrol by calling a nationwide strike on the 10th of September.
• Unlike Karnataka, West Bengal, Rajasthan, and Andhra Pradesh, the State Government of Tamil Nadu has not reduced the sale tax on diesel.
• Therefore, all the three oil marketing enterprises continued mounting the price of diesel until the last day of the month.
• As the crude oil price accelerated to $77.88 per barrel from $72.53 per barrel and the rupee slid drastically against the dollar, diesel prices at all the fuel stations in Chennai were up by 6.20%.
• For this quarter, the lowest rate was Rs.71.12 per litre and the highest rate was Rs.79.08 a litre.
• Within a span of just three months, diesel rate in Chennai, the capital city of Tamil Nadu, was increased by Rs.8 per litre by Hindustan Petroleum, Indian Oil and Bharat Petroleum.

Diesel Price in Chennai Compared to other Metros

Diesel rates differ from city to city as well as from fuel station to fuel station. This is due to the tax rates, which vary from state to state. In Tamil Nadu, the state government levies 25% as VAT on diesel, while it charges 34% on the sale of petrol in the state. In Mumbai, diesel attracts VAT of 24%, in Kolkata, it’s 17% or Rs.7.70 per litre (whichever is higher), and in Delhi, it’s 16.75% + 25p Pollution Cess with Surcharge.

Diesel Price Vs. Petrol Price in Chennai

While the basic cost of fuel is the same for petrol and diesel, other charges lower the diesel rate. The taxes levied by the Centre as excise duty and the local sales tax or VAT charged by the respective State, are much lower than charged on the sale of petrol, making diesel prices in Chennai cheaper than petrol prices.

Is GST Applicable in Diesel?

India moved to a new taxation system known as the Goods and Service Tax (GST), which was introduced from 1 July 2017. Under this system, all goods and services were under one taxation in the country; however, five petroleum products such as diesel, petrol, crude oil, natural gas and aviation turbine fuel (ATF) were kept out of the ambit of GST.

Diesel and petrol continue to attract the Centre’s excise duty and the respective state’s local sales tax or VAT. The total tax incidence of excise duty and VAT is around 45-50% for petrol and 35-40% for diesel. Under the GST, the highest tax slab is 28%, which is comparatively lower, thereby impact the revenue earned by both the Centre and the State. The Centre could lose up to Rs.20,000 crore as revenue from the sale of fuel in the country, while the states want to keep their revenue to meet any contingency.

Also, GST is an ad valorem charge, which is levied as a percentage on the ex-factory price. This could lead to a sudden leap in retail prices whenever refinery gate rates are hiked due to the rise in the global crude oil prices and the reverse is also a possibility.

Quarterly Diesel Price Trend in Chennai between April and June 2018

Diesel Price Trend in Chennai in April 2018

• The Central Government decided not to revise the excise duty on diesel per litre and even the State Government of Tamil Nadu has not revised the Value-added Tax on diesel per litre in April 2018.
• Dynamic fuel pricing, a newly adopted system for revising fuel rates, announced the price of a litre diesel to be Rs.68.12 a litre on 1st in Chennai, the capital city of Tamil Nadu.
• Crude oil rates and the exchange rate will influence the pricing of diesel across Indian cities. Since the cost of crude oil per barrel climbed to $69.30, diesel price in Chennai was up 2.11% to Rs.69.56 a litre in April 2018.
• On 3rd and 4th, the fuel rate was steady at Rs.68.41 a litre. Similarly, the fuel price remained unchanged at Rs.69.56 a litre on 25th, 26th, 27th, 28th, 29th and 30th.
• For the month, the highest and lowest diesel rates stood at Rs.69.56 a litre and Rs.68.12 a litre respectively.

Diesel Price Trend in Chennai in May 2018

• The opening date price for this month stood at Rs.69.56 a litre and for the first 11 days of the month, diesel was sold at a price of Rs.69.56 a litre.
• After the second week, fuel companies such as Indian Oil, Hindustan Petroleum and Bharat Petroleum have started increasing diesel rate in Chennai in sync with the changes in the price of crude oil per barrel.
• Diesel rate in the city of Chennai was Rs.71.63 a litre on 21st and it further increased to Rs.73.07 a litre on 28th. The highest fuel price for the month stood at Rs.73.22 a litre.
• As the cost of unrefined oil per barrel increased by $6, diesel rates were increased by 4.92% in Chennai. The growth rate was more than 5% in other metro cities such as Mumbai, Kolkata and Delhi.
• Domestic factors such as excise duty and Value-added Tax were not revised in this month as well. Therefore, they had no influence on the revision of diesel rates across the city.

Diesel Price Trend in Chennai in June 2018

• Like the first two months, the Central Government charged excise duty at Rs.15.33 on diesel per litre in this month also.
• Value-added Tax is something that changes diesel rate from one city to another. Like excise duty, even Value-added Tax was not changed by the State Government of Tamil Nadu.
• As the demand for unrefined oil in overseas markets has reduced, the cost of a barrel of crude oil per barrel fell to $73.85 in June 2018. Therefore, diesel price in Chennai was decreased by 2.70%.
• Because of the same reason, diesel prices in Delhi, the national capital; Kolkata, the capital city of West Bengal; and Mumbai, the capital city of Maharashtra were decreased by Indian Oil, Hindustan Petroleum and Bharat Petroleum.
• Over the last three months, the impact of the USD/INR exchange rate was reported to be minimal. It is only the crude oil price that made diesel price to increase in April and May.
• For the whole quarter, the highest diesel rate was declared at Rs.73.10 per litre on 1st June whereas the lowest diesel rate was announced at Rs.68.12 on 1st April.

Trend in Diesel Price in Chennai between January and March 2018

Trend in Diesel Price in Chennai in January 2018

• Under the dynamic fuel pricing framework, Indian Oil revealed an opening day price of Rs.62.96 a litre, which was also the lowest price for the whole month.
• Between 1 and 31, the OMCs unstoppably hiked the diesel rate considering the performance of the exchange rate and the trends in overseas crude oil prices.
• The fuel cost was up 3.36% in Chennai on 15 since the cost of crude oil (Indian Basket) glided to $68.02 per barrel and the USD was down 0.25% to Rs.63.53 during the first half.
• No changes were made in the excise duty, the overheads of the OMCs, transportation costs, the Value-added Tax in Tamil Nadu, and the commission charged by fuel retailers.
• Internationally, the extraction and distribution of crude oil were not affected by production cuts, bad weather conditions, and the political events in oil-producing countries such as OPEC.
• The greenback was devalued 0.04% to Rs.63.53 against the local currency and the average crude oil price (Indian Basket) soared to $67.06 a barrel. As a result, the diesel rate in Chennai was up 6.49% to Rs.67.05 a litre on 31, the last day of the month.

Trend in Diesel Price in Chennai in February 2018

• On 1, the fuel rate in Chennai stayed unaffected by the Union Budget presented by the Finance Minister, who proposed to reduce the excise duty by Rs.2 a litre and other taxes by Rs.6 per litre and impose an additional levy of Rs.8 per litre.
• Since OMCs sustained to trek the fuel rates until the end of the month, interestingly, they have affirmed the highest price at Rs.67.71 a litre on 6. The next day followed the same offer.
• Neither the central tax nor the state tax nor the dealer commission nor the expense of the OMCs was altered throughout the month.
• The crude oil cost of Indian Basket this month decreased to $63.54 a barrel from $67.06 a barrel a month ago. The USD/INR accelerated to Rs.65.22.
• In the end, Indian BPCL, Indian Oil and BPCL confirmed a 2.32% price fall in the diesel price and the lowest rate of Rs.65.49 a litre on 25.
• Not only the city of Chennai, other Indian metro cities such as Delhi, Mumbai and Kolkata have experienced a huge drop since there was a reasonable fall in the demand for unrefined oil globally.

Trend in Diesel Rate in Chennai in March 2018

• The first-day price offer of diesel enhanced 0.27% to Rs.65.68 per litre, which was also retained as the lowest price for the month. It is something interesting to observe.
• Unlike the previous two months, the fuel rate was steady for a few days. For instance, an offer of Rs.66.44 a litre was made on 6 and 7 and Rs.66.32 a litre on 13 and 14 correspondingly. It is because of the stable USD/INR exchange rate.
• With the increasing demand for crude oil, the OMCs in India stretched augmenting the diesel price in Chennai throughout the month. However, at Rs.67.93 a litre, the highest rate was observed on 31.
• Though the crude oil prices have fallen in February, the fuel cost was up 3.42% to Rs.67.93 a litre this month, but the growth rate was less compared to the previous month.
• Over the last three months, the average crude oil price fell 4.86% to $63.80 a barrel, which is equivalent to 159 litres. Moreover, the INR strengthened against the base currency.
• The growth rate in the petrol price is less compared to that of in the diesel price across all the prime cities in Tamil Nadu, including its capital.

Also Check Diesel Price in NearBy Cities of Chennai

*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.