Diesel Price In Delhi Today

Diesel Price In Delhi

Delhi continues to be the benchmark or an indicator of any increase or decrease in fuel prices in the country. With a population of more than 18 million, the Union territory is the second most populous city in India. Prices of petrol and diesel are revised daily, aligned to market rates, which means diesel price in Delhi will increase every time global crude oil prices increase and rupee depreciates against the US dollar.

Earlier, fuel prices used to be revised every two weeks or 15 days, however, diesel prices in Delhi are currently revised daily under the ‘Dynamic Fuel Pricing’ mechanism. It’s important to check the diesel price in Delhi as any decline in cost could save some money.

State-run Oil Marketing Companies (OMCs) such as Indian Oil, Bharat Petroleum and Hindustan Petroleum fix the new diesel price in India daily based on the ‘Dynamic Fuel Pricing’ mechanism. Depending upon the changes in the crude oil price in the global markets, OMCs fix diesel prices in Delhi.

Dynamic Fuel Pricing Meaning

Why do petrol prices fluctuate in India? Since fuel prices in India are proportional to the international price of crude oil, rates are revised accordingly by State-owned OMCs. This helps oil companies to offset any losses as well as pass on any benefits to consumers immediately.

Oil firms consider the two week or 15-day average price of crude oil along with the rupee-dollar exchange rate to arrive at the final selling price of diesel or petrol. The new price of petrol or diesel comes into effect from 6:00 am IST, this system was implemented from 16 June 2017 in the country.

The move was aimed to ensure that the benefit of even the smallest change in crude oil prices can be passed on to consumers and dealers. Prior to this method, fuel prices were every fortnight in the country. However, it led to a sudden rise or decline in fuel prices in the country, burdening the common man.

With the ‘Dynamic Fuel Pricing’ mechanism in place, it removes any sudden leap in prices that need to be effected at the end of the fortnight.

Quarterly Diesel Price Trend in Delhi between October and December 2018

Diesel Price Trend in Delhi for the Quarter Ending on 31 December 2018

• For all the 31 days in October, based on the changes in the rupee-dollar exchange rate and crude oil prices, diesel prices were offered at all the fuel supply centers in Delhi, the national capital.
• During the first week, oil companies reported a reasonable drop in the price but during the second week, the price was up by over Rs.2.00 a litre.
• Similarly, the prices continued falling in the third and fourth weeks of October. Except the central tax, other indigenous influencers remained unchanged.
• Unlike other states, the State Government of Delhi denied reducing the sales tax. Prompted by a decrease in petroleum prices, diesel rate fell 1.78% to Rs.73.83 a litre, which was the closing date price.
• No fuel rates in Delhi were increased in the month of November as the crude oil cost travelled downwards.
• On the basis of the opening date and closing date prices, the trend in diesel rates in Delhi was reported to be declining in November also. It is a result of the rate of petroleum per barrel, which fell to $65.40 per barrel from $80.08 per barrel.
• For October and November, the lowest rate stood at Rs.67.81 a litre and the highest rate at Rs.73.83 a litre respectively.
• Using the system of dynamic fuel pricing (the daily price revision system), the price of diesel was done throughout the month of December.
• The rupee-dollar exchange rate was not highly lithesome. On the other hand, in the international market, oil rates slid by a big margin.
• So, within a span of just three months, diesel prices in Delhi slid by Rs.12 per litre.
• In other metro cities in India such as Mumbai, Kolkata and Delhi also, oil marketing companies, including public and private sector, decreased the price by Rs.12 a litre. It was caused by a drop in the price of unrefined oil, which is also called petroleum.
• Any changes in the domestic factors such as the excise duty, the sales tax, the commission for dealers, etc., are also accounted for while revising fuel rates.
• But, the pricing of diesel remained unaffected by these factors except for the excise duty.

Diesel Price Trend in Delhi between July and September 2018

Diesel Rate Trend in July 2018 in Delhi

• Since India has deployed dynamic fuel pricing last year, all the three oil retailing enterprises are required to update diesel rate based on the INR/USD exchange ratio and the price of petroleum/crude oil.
• Among the metro cities, diesel prices in Delhi, which is the capital city of India, are lesser because of the sales tax.
• If the Centre cuts the excise duty, fuel rates will fall and vice versa; if the Delhi Government increases the VAT, diesel rates will increase and vice versa. The sales tax and the central tax were not reviewed in July.
• The local currency was seen continually depreciating versus the currency of the USA throughout the month of July 2018. Moreover, crude oil rates fell to $73.47 per barrel from $73.83 per barrel.
• In the end, the devalued currency caused a 0.71% hike in diesel rates in Delhi. The lowest and highest rates stood at Rs.67.38 per litre and Rs.68.51 per litre correspondingly.
• The Centre was facing the critics from the commoners and the politicians for making diesel expensive in Delhi in July. But it was not willing to diminish the central tax considering its impact on the financial health of the country.

Diesel Price Trend in Delhi in August 2018

• Fuel rate on 1 August 2018 soared by 11 paise per litre. It further mounted to Rs.68.06 a litre on the 3rd. Between 1 August and 7 August, diesel rate in Delhi ascended by 57 paise at the Indian Oil supply centers.
• Between 7 August and 14 August, the price was reported to be steady at Rs.68.54 per litre impacted by the overseas factors.
• The price was also steady at Rs.68.54 a litre on the 15th and jumped by 28 paise per litre on the 16th. On 17, 18 and 19 August 2018, the commodity was marketed at a price of Rs.68.90 a litre in the national capital.
• On the 24th, the price of a litre of diesel was valued at Rs.69.23, Rs.69.51 a litre on the 27th and Rs.69.80 a litre on the 29th.
• Because of the stability in diesel rates and some hikes in the month, the highest fuel rate was noted at Rs.70.26 a litre on the last day of the month.
• Just like July 2018, a growth rate of 3.36% was noticed this month because of the appreciation of the dollar versus the indigenous currency.

Diesel Rate Trend in September 2018 in Delhi

• HPCL, BPCL, IOCL and other oil companies continued to revalue the commodity as per the daily revision mechanism in September.
• Between 1 September and 7 September, the price increased by Rs.1.65 per litre. This was a massive rise. In the second and third weeks also, the price was increased by all the private and public sector OMCs.
• After the first week, the Congress Party leaders and the leaders of 21 regional political parties in India called the countrywide bandh. They urged the Modi-led government to cut the excise duty.
• The Bharat Bandh had no impact on the pricing of diesel in Delhi as the Centre denied to cut the excise duty.
• While the opening date price stood at Rs.70.42 a litre, the closing date price stood at Rs.74.79 a litre. We can here notice a 6.20% increase in diesel prices in Delhi in the last month of the quarter.
• The lowest and highest diesel rates were estimated to be Rs.67.38 a litre and Rs.74.79 a litre respectively between July 2018 and September 2018.
• The excise duty on a litre of diesel remained unrevised at Rs.15.33. The commodity was taxed by the State Government of Delhi at 17.28% throughout the quarter.

Factors Affecting Diesel Prices in Delhi

Like other cities in India, diesel rates in Delhi include several other components apart from the global crude oil price and the rupee-dollar exchange rate. Components such as freight charges, entry tax, refinery processing, oil companies’ margin and logistics are levied before arriving at the basic cost of fuel. Additionally, petrol pump owners’ commission is included as well as excise duty levied by the Centre and the respective State charges local sales tax or Value Added Tax (VAT).

However, the biggest impact on fuel prices is the global crude oil price and the exchange rate of the Indian currency over the US dollar. Crude oil prices fluctuate for various reasons, let’s review them in detail:

• Current Supply and Demand: For several decades, the Organization of Petroleum Exporting Countries (OPEC) has been the biggest supplier of crude oil in the international market, influencing oil prices. Policies of OPEC are affected by geopolitical developments, hence, any pressure on one of the OPECs will lead to a cut in oil supply. This, in turn, increases the crude oil price in the market. Also, any massive increase in supply could lead to a fall in oil prices.
• Geopolitical Tensions: Political events and crisis such as war, political upheaval, natural disasters are factors which influence the oil price. Conflicts in any oil-producing region of the world could potentially reduce the supply of oil.
• Future Supply and Reserves: Among the biggest oil-producing or oil-consuming countries, crude oil is reserved to keep their economies healthy in case oil prices incline. Oil is stocked up when the rate is low and then supplied through the economy to keep prices down.

Quarterly Diesel Price Trend in Delhi Between April and June 2018

Diesel Price Trend in Delhi in April 2018

• On 1 April 2018, the diesel price in Delhi stood at Rs.64.58 per litre, the lowest price of the month in the Nation’s capital.
• Diesel prices during the first and second week remained steady with slight variations due to the fluctuations in the global crude oil rate.
• By mid-April, diesel prices in Delhi grew by 51 paise per litre compared to the price recorded on the first day of the month.
• Diesel prices continued to rise in tandem with the increase in crude oil rates and by the end of the month, the diesel price had increased by Rs.1.35 per litre with diesel being sold at Rs.65.93 on the last day of the month. However, the highest diesel price recorded in the month stood at Rs.65.97 on 24 April 2018.
• During the month, diesel prices reflected an upward trend of 2.10% largely due to the rise in the crude oil rate.

Diesel Price Trend in Delhi in May 2018

• The diesel price on 1 May 2018 in Delhi remained same as the previous day with the fuel sold at Rs.65.93 per litre. State-run oil companies did not revise the diesel price in Delhi and other states till the 11th of the month.
• The lowest diesel price in May 2018 in Delhi stood at Rs.65.93 per litre which remained unchanged till the 11th of the month.
• Post 11th, oil companies started to revise the diesel price in tandem with the global crude oil rate.
• Diesel prices continued to increase in the third and fourth week with crude oil rate standing at $80 per barrel.
• The highest diesel price in Delhi recorded during the month was on 29th when diesel price hit an all-time high in Delhi as well as other states in the country.
• Diesel prices are revised daily by oil companies when the preceding day’s crude oil rate and the currency exchange value is considered before fixing the Retail Selling Price (RSP) of diesel.
• The month of May 2018 witnesses a significant rise in fuel prices with an upward trend of 5.10% mainly due to the rise in crude oil prices.
• The rise in crude oil prices is attributed to the geopolitical tensions due to concerns of a potential shortage in the supply of crude oil in the global market. With the US administration pulling out of the nuclear deal with Iran, there were apprehensions that Iran could face sanctions.

Diesel Price Trend in Delhi in June 2018

• With the geopolitical tensions declining, crude oil rates started to fall during the first week of the month.
• On 1 June 2018, the diesel price in Delhi stood at Rs.69.24 per litre with a slight decrease compared to the previous day. This price was also the highest for the month in Delhi.
• With crude oil prices reaching peak levels, the Organisation of Petroleum Exporting Countries (OPEC) and its key allies including Russia decided to meet on 22 June 2018 to address the concern of a rising fuel price across the globe.
• Fuel prices including that of diesel began declining but not significantly. However, during the course of the third and fourth week, diesel prices fell considerably.
• The OPEC and its key ally Russia agreed to moderately increase the output which led to the decline in diesel prices across the globe as well as in Delhi.
• During the last four days, diesel prices fell to its lowest for the month which stood at Rs.67.38 per litre.
• Overall, diesel prices in June 2018 in Delhi reflected a downward trend at 2.67% largely due to the fall in crude oil rates influenced by the increase in output which was assured by the OPEC and Russia.

Diesel Price Calculation in India

Know how the diesel price is calculated before it’s sold in the country. State-run oil companies fix the price based on the below computation of fuel prices. Please note, prices are as of 3 January 2019.

Diesel Price in Delhi Compared to other Metro Cities

Fuel prices in Delhi are the cheapest compared to other major metro cities of the country. This is due to the lower local sales tax or VAT being levied on the sale of fuel in Delhi. In Mumbai, diesel attracts VAT of 24%, while Delhi charges 16.75% + 25p as Pollution Cess with Surcharge.

Trend in Diesel Price in Delhi between January and March 2018

Trend in Diesel Rate in Delhi in January 2018

• Diesel per litre was valued at Rs.59.96 at Indian Oil Company in Delhi on 1. Of course, there is a slight difference in the offer made by HPCL and BPCL owing to the transportation overheads.
• The opening date price also turned out to be the lowest offer for the month since the fuel rate was on an upward trend until 31. In Delhi, the VAT on diesel was levied at 17.28%, 24.86% in Mumbai, 17.59% in Kolkata, and 24% in Chennai as of 1 April 2018.
• As a result, the fuel price is priced lower in Delhi compared to other metro cities. The price encompasses the central tax of Rs.15.33, the overheads of the OMCs, pollution cess, and the commission charged by fuel suppliers.
• The indigenous tax slabs on diesel were not modified this month. Therefore, a 7.09% price up must only be accredited the cost of crude oil, which declined 7.65%; and the USD/INR exchange rate, which decreased to Rs.63.56.
• The first 7 days produced a 0.87% climb in the diesel price whereas the first half reported a 2.37% rise. At the end of the third week, the price offer increased to Rs.62.83 a litre further.
• Finally, the month closed with the highest price of Rs.64 a litre, which was up 1.86% compared to the previous week’s offer.

Trend in Diesel Prices in Delhi in February 2018

• Indian Oil, BPCL and HPCL unveiled a price of Rs.64.09 a litre under dynamic fuel pricing on 01. Neither a cut in the excise duty nor a drop in other taxes nor the imposition of a further tax impacted the first-day offer.
• The demand for unrefined oil remained unaffected in the first week, and thus, the fuel costs enhanced to Rs.64.20 per litre on 7. This was also the highest price for February.
• Conversely, the fuel started losing its value after the week 1 in tandem with the conversion rate and the crude oil value in overseas markets.
• So, on 14, the diesel rate further lessened to Rs.63.48 a litre, Rs.62.28 a litre on 21, and Rs.62.13 a litre (lowest price for the month) on 28.
• The USD/INR conversion rate was Rs.63.95 on 1 and further increased to Rs.65.22 on 31 at a growth rate of 1.98%.
• Likewise, in January, the average cost of crude oil stood at $67.06 a barrel, which further reduced to $63.54 a barrel in February.
• A reasonable plunge in the cost price of crude oil in transnational markets was triggered by the lessened demand for the commodity.

Trend in Diesel Price in Delhi in March 2018

• The diesel rate was up 0.27% to Rs.62.30 a litre as on the opening date. It was not scheduled to withdraw the excise duty or the VAT this month.
• Unlike February, the fuel rate was not lowered. For a few days, it was stable yet. The price stood at Rs.63.01 a litre on 6 and 7, and Rs.62.90 a litre on 13 and 14 correspondingly.
• After the week 2, crude oil commenced accruing demand, and thus, the market price of crude oil rebounded to $62.80 per barrel on 14 and $65.97 a barrel on 29.
• Therefore, the diesel rate in Delhi began climbing. In the first week 1, it was up 1.13%, 0.17% in the second week, 0.04% in the week 3, and 1.33% in the last week.
• For the quarter, the highest price stood at Rs.64.40 a litre in March 2018 whereas the lowest price at Rs.59.76 a litre in January 2018.
• This quarter produced a 7.76% ramble caused by a decent amount of increase in the crude oil’s price and a devalued currency of the US. No other overseas price influencers should be accounted for.

Diesel Price Vs. Petrol Price in Delhi

While the cost of the basic crude oil price for both petrol and diesel is the same, additional charges make diesel prices lower compared to that of petrol. The excise duty and the local sales tax or VAT is much lower compared to the rates levied on petrol, making the diesel price in Delhi cheaper than petrol prices.

Why Petrol and Diesel is not under GST?

When Goods and Service Tax (GST) was implemented in July 2017, five petroleum products such as petrol, diesel, crude oil, natural gas and aviation turbine fuel (ATF) were exempted from attracting GST. Neither the Centre or states are in favour as there could be huge revenue loss to both their respective exchequer. If petrol and diesel come under GST, the Centre will lose more than Rs.20,000 crore input tax credit it earns through excise duty, while states are keen to keep their revenue pool to meet any contingencies.

Currently, the total tax incidence of excise duty and VAT comes around 45-50% on petrol and 35-40% on diesel. However, under GST, the total tax incidence is 28% which affects the revenue earned by the Centre as well as states. Also, GST being an ad valorem levy, charged as a percentage on the ex-factory rate, would have a huge impact on retail prices whenever refinery gate rates are hiked amid a rise in crude oil prices in the global market and vice versa would also be true.

Also Check Diesel Price in NearBy Cities of Delhi

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