Diesel Price in Dindigul
Dindigul is located in the Indian state of Tamil Nadu. Dindigul is well connected to major cities in the country. The city’s road transportation system requirements are supported by town buses, while private companies offer minibus service to several destinations. Other popular forms of public transport are auto rickshaws and taxis. Commuters in Dindigul also use personal vehicles which have added to the growing vehicular density.
Diesel prices in Dindigul are fluctuating in nature and State-owned oil companies sell diesel through the daily pricing mechanism. Fuel companies such as Indian Oil, Hindustan Petroleum and Bharat Petroleum operate more than 90% of petrol pumps across the city.
Oil companies purchase crude or unrefined oil from oil-producing countries which are then refined and supplied to fuel stations across the country. Since India requires more than 70% of crude oil, fluctuations in crude oil price affect the diesel price in India. Several elements influence the cost of crude oil in the international market and domestic factors such as taxes and operational costs add to the diesel cost. Let’s review each of these elements in detail to understand how diesel is priced in Dindigul.
Elements which Impact the Diesel Price in Dindigul
As mentioned, diesel prices are influenced by international and domestic factors. While international factors include crude oil prices and the currency exchange rate, domestic factors include taxes, oil company’s profit margin, dealer’s commission and other operational costs.
- Crude Oil Price: Crude oil prices change due to seasonal variations, shortage in supply, geopolitical tensions or increase in output. Fuel companies purchase crude oil which is then refined and supplied to fuel stations across the country. If the crude oil price increases, diesel prices are hiked in tandem with the market or vice versa.
- Currency Exchange Rate: Trading of crude oil in the international market typically happens in US dollars. If there is an increase in the exchange value of the USD, the cost to purchase crude oil rises, likewise, if the rupee gains or the dollar value depreciates, the price of crude oil declines.
- Taxes: Currently, the supply of diesel in India attracts the Centre imposed excise duty and the state levied a sales tax or Value Added Tax (VAT). Diesel is charged Rs.15.33 per litre as excise duty, while the state of Tamil Nadu levies VAT at 24%. If there are any changes to the tax rate, diesel prices in Dindigul either incline or decline.
- Profit Margin & Dealer Margin: Oil companies purchase crude oil and ship it to their respective refineries. The crude oil is refined to diesel and then supplied to fuel stations across the country. A profit margin and the dealer commission (commission to fuel station owners) is included in the Retail Selling Price (RSP) of diesel. Similar to the above factors, a change in the profit margin or the dealer’s commission leads to a revision in the diesel price.
When is the Diesel Price in Dindigul Revised?
Diesel prices are revised on a daily basis under the ‘Dynamic Fuel Pricing’ mechanism. Fuel companies include the preceding day’s crude oil price and the currency exchange rate before fixing the final selling price of diesel in Dindigul. Prices are updated daily 6:00 a.m. IST automatically in automated fuel stations, while it’s manually updated in non-automated petrol pumps.
The daily revision in diesel prices was introduced to offset any losses arising over a sudden incline or decline in crude oil prices. Prior to the daily pricing mechanism, diesel prices in Dindigul were revised every fortnight. Diesel prices used to be updated on the 1st and 16th of the month. However, under this method, oil companies had to wait a fortnight to revise the diesel price in case there’s a sudden spike in the crude oil prices or due to a weaker rupee. Hence the ‘Dynamic Fuel Pricing’ mechanism was introduced effective 16 June 2017.
Tips to Track the Diesel Price in Dindigul
With diesel prices revised on a daily basis, oil companies have introduced several methods to track the current diesel price in Dindigul and across other cities in the country.
- Via Mobile Apps: With the rise in the usage of smartphones, oil companies have launched mobile apps to track the current diesel price in a city. Bharat Petroleum has introduced the ‘SmartDrive’ app, Indian Oil has launched the ‘Fuel@IOC’ app, while Hindustan Petroleum customers can utilise the ‘MY HPCL’ app to get the latest diesel price in a city.
- Via SMS Service: Customers can take advantage of the SMS services launched by the oil companies. Consumers need to send the SMS in the format below:
o Bharat Petroleum: SMS RSP
o Indian Oil: SMS RSP
o Hindustan Petroleum: SMS HPPRICE
- Online Portal: Fuel companies update their respective website with the current diesel price in Dindigul as well as other in the country.
Calculation of the Diesel Price in Dindigul
To understand the concept of ‘Dynamic Fuel Pricing’ mechanism better, the table below is the breakup of the diesel price in Dindigul recorded on 3 June 2018.
|1||Global Crude Oil Price + Freight Charges||$78.30 per barrel = Rs.32.98/Litre (considering $1=66.96 and 1 barrel oil = 159 litres)|
|2||Oil Companies’ Profit margin, transportation, refining, and other operational costs||Rs.8.10/Ltr|
|3||Centre’s Excise Duty + Road Cess||Rs.15.33/Ltr|
|4||Commission to dealers||Rs.2.53/Ltr|
|5||State’s Value Added Tax (VAT) + 25p Pollution Cess with surcharge||Rs.14.40/Ltr|
|Total||Retail selling price of diesel in Dindigul||Rs.73.34/Ltr|
Petrol Vs. Diesel Price in Dindigul
Petrol prices are higher compared to diesel as the tax rate and operational costs differ. While the excise duty on petrol is Rs.19.48 per litre, diesel is charged Rs.15.33 a litre. The State levies VAT on petrol at 32.06% and diesel at 24%. Also, the operational costs differ between petrol and diesel.
Is GST Applicable on Diesel in Dindigul?
India moved to a new unified tax regime known as the Goods and Service Tax (GST) which was rolled out on 1 July 2017. Petroleum products such as diesel and petrol; however, have been exempted from attracting the GST. The Centre and the states earn huge revenue through taxes on the supply of diesel and petrol by imposing the excise duty and the VAT respectively. However, the highest tax slab in GST is 28%, which is lower compared to the current tax rates on the sale of diesel. Hence, GST is currently not applicable to diesel in Dindigul or other cities in the country. If diesel comes under the framework of the new tax regime, there could be a considerable fall in the diesel price.
*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.