Diesel Price in Chennai
Located on the Coromandel Coast of Bay of Bengal, Chennai is the capital city of south Indian state of Tamil Nadu. The city is known for its educational, cultural and economic centres and is also one of the most populated urban agglomeration in India.
The public transport in the city is mainly composed of rapid transport system (Chennai Metro), public and private buses, cabs, metered-taxis and autos. However, private vehicles such as two-wheelers and four wheelers constitute major part of the city’s vehicular traffic.
As of 2016, there are more than 3.7 million vehicles plying on the roads of Chennai, making it the second city in the country to have the highest number of vehicles on its roads after New Delhi.
Chennai also has the highest vehicle density with over 2000 vehicles per kilometer of road. The increasing number of vehicles along with its narrow roads create a lot of traffic chaos in the city, especially during peak hours.
Let’s see whether or not the increasing number of vehicles in the city lead to higher fuel consumption and higher fuel prices.
Factors Affecting Diesel Rate in Chennai
Diesel rate in Chennai, just like in other Indian cities, is composed of various components that are added at multiple stages of product cycle.
Since the price has various components involved, any slight change in any of the components would directly impact the diesel rate in Chennai, India.
To better understand how various factors influence diesel price, it’s important to know the pricing structure of diesel.
Cost & freight (C&F) price is the primary component of diesel pricing. It is nothing but the price at which the Indian oil companies buy crude oil from the foreign companies. As the name suggests it also includes freight charges that are involved in transporting crude oil from the foreign land to India.
The next element of diesel pricing is the US dollar to Indian rupee exchange rate. As oil trading typically happens in US dollars, change in exchange rate would impact diesel price.
Based on the above two components, the trade parity landed cost of diesel is calculated as per the daily pricing methodology. The oil company then adds its profit margin, marketing cost, freight and other charges and sells diesel to the dealers who are nothing but the petrol pump owners.
Then come the other two major elements of Indian fuel pricing, the state and central government taxes. While the central government charges excise duty on diesel, the state governments levy value added tax (VAT), which together constitute more than 50% of diesel price in India.
|Also Check: Diesel Price in Tamil Nadu|
Added to them are the dealer’s commission and other charges such as surcharge and pollution cess, which all together add up to the retail selling price of diesel.
The various elements involved in diesel pricing, a few of which are volatile in nature like the international crude oil price and the US dollar to rupee exchange rate, effect diesel price in Chennai, or in any other city, on a daily basis.
Other factors which may not impact diesel price often are the state and central taxes. Any revision in the taxes would directly affect the price.
The most recent revision in the central excise duty happened in the month of October 2017, when the central government reduced the excise tax on diesel by Rs. 2/Lt shielding the customers from the increasing international oil prices.
Diesel Price Trend in Chennai between July and September 2018
|Opening date price||Rs.71.12 a litre||Rs.71.78 a litre||Rs.74.46 a litre|
|Closing date price||Rs.71.66 a litre||Rs.74.23 a litre||Rs.79.08 a litre|
|Highest price||Rs.72.32 a litre recorded on the 16th||Rs.74.23 a litre recorded on the 31st||Rs.79.08 a litre recorded on the 30th|
|Lowest price||Rs.71.12 a litre recorded on the 1st||Rs.71.78 a litre recorded on the 1st||Rs.74.46 a litre recorded on the 1st|
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.
Quarterly Diesel Price Trend in Chennai between April and June 2018
|Opening date price||Rs.68.12 a litre||Rs.69.56 a litre||Rs.73.10 a litre|
|Closing date price||Rs.69.56 a litre||Rs.73.16 a litre||Rs.71.12 a litre|
|Highest price||Rs.69.56 a litre recorded on 30th||Rs.73.22 a litre recorded on 29th||Rs.73.10 a litre recorded on 1st|
|Lowest price||Rs.68.12 a litre recorded on 1st||Rs.69.56 a litre recorded on 1st||Rs.71.12 a litre recorded on 27th|
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
|Opening date price||Rs.62.96 a litre||Rs.67.06 a litre||Rs.65.68 a litre|
|Closing date price||Rs.67.05 a litre||Rs.65.50 a litre||Rs.67.93 a litre|
|Highest price||Rs.67.05 a litre booked on 31||Rs.67.71 a litre booked on 5 and 6||Rs.67.93 a litre booked on 31|
|Lowest price||Rs.62.96 a litre booked on 1||Rs.65.49 a litre booked on 25||Rs.65.68 a litre booked on 1|
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.
Diesel Price in Chennai Compared to Other Metro Cities
Compared to other metro cities like Mumbai, Delhi, Kolkata, Bengaluru and Hyderabad, diesel price in Chennai is the third highest.
The difference in diesel price among metro cities is primarily due to different percentage of tax collected by the respective state governments of the cities.
The highest diesel price is observed in Hyderabad, while the lowest is in Delhi as of October 2017.
State Taxes and Diesel Price in Chennai
As discussed earlier, taxes constitute more than 50% of diesel price in Chennai. Of the two taxes being charged on diesel, central excise duty remains same across the country, whereas the value added tax (VAT) is state specific.
For Chennai city, Tamil Nadu government collects VAT on diesel and other petroleum products. As of October 2017, the state charges 25% VAT on a litre diesel, second lowest compared to other south Indian states like Andhra Pradesh, Kerala, Telangana, and Karnataka. Lowest VAT of 19% is being charged by Karnataka government.
The last revision of VAT in Tamil Nadu happened in the month of March 2017, when the tax was hiked from 21.4% to the present 25%. The revision increased the rate of diesel by Rs. 1.70/Lt in the same month.
How often Diesel Costs are Revised in Chennai
Diesel prices in Chennai, as in rest of the country, are being updated on a daily basis, with the implementation of dynamic fuel pricing in India starting 16 June 2017.
Dynamic fuel pricing also known as daily revision of fuel prices aligns diesel prices in the country to that in the international markets. It is introduced to bring transparency in the fuel pricing in India, and also to deliver even the slightest benefit in the diesel price to the end user immediately.
As international crude oil price and dollar to rupee exchange rate are two critical factors that affect the diesel rate on daily basis, any change in these two components will be transferred to the customer with immediate effect, unlike previous fortnightly revision practice, which used to give price shocks to the customers.
Effect of GST on Chennai Diesel Price
GST or the goods and services tax is introduced in India in July 2017 to bring uniformity in taxes across the country. However, a few products are currently kept outside the purview of GST hence are still being taxed as per the old tax regime, where state and central governments levy taxes separately.
Diesel is also one among the products that is currently kept outside GST and is being charged as per the old practice. Hence the effect of GST on the price of diesel and other petroleum products for now is nil.
If diesel is brought under GST, its price may go up or come down based on the tax category it belongs to. Diesel price will come down in Chennai only when the new GST tax is less than the current taxes being levied on diesel.
Diesel Rate versus Petrol Rate in Chennai
Just like in other Indian cities, diesel rate in Chennai is lesser than that of petrol, mainly because of the different tax rates on each of the products.
Currently, the Tamil Nadu government levies 34% on petrol, whereas on diesel it is only 25%. The difference in tax rates coupled with variation in other factors such as dealer’s commission, profit margins, cost of transportation, crude oil prices bring variation in the rates of the two commodities.
Also Check Diesel Price in NearBy Cities of Chennai
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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.