Diesel Price in Gurgaon
Diesel price in Gurgaon has comparatively increased than the previous months. In fact, many regions are being affected and the news of fuel hike is not new. India merged with a group of selected nations like Australia and the United States recently, and that’s a key reason for the diesel price to fluctuate often these days.
Gurgaon is a systematically organized city in the southwest of New Delhi, where the diesel consumption has been mounting for the past two decades. Diesel is much different from petrol. It is used in diverse sectors like transportation, powertrains, gasoline, and in other manufacturing plants. However, a slight hike in the diesel price can have a deep impact on the overall financial health of the state.
Now, considering Gurgaon, the present fiscal year saw various changes in the fuel price. Here is an in-depth outline of the past and present price trends in the Gurgaon fuel market.
|Also Know: Petrol Price In Gurgaon|
Diesel Rate In Gurgaon Today:
After the recent revision made by the Indian Oil Corporation (IOC), the diesel rate in Gurgaon today is at Rs. 61.47 per litre. This revised price is inclusive of the below:
- The international crude oil charges
- State levies or taxes
- INR to USD exchange charges
All the above comes into effect on 10 January 2018 from 6 AM onwards. Compared to the previous price, the current diesel price in Gurgaon has been hiked by Rs. +0.19. A similar revision in the fuel prices was seen in a few other state-owned diesel retailers like BPCL (Bharat Petroleum Corporation Limited), HPCL (Hindustan Petroleum Corporation Limited), Shell India, and Essar Oil.
|Also Check: Diesel Price in Haryana|
Historical Data Of The Diesel Price In Gurgaon For The Past 6 Months
This table shows a complete overview of the historic diesel rates in Gurgaon for the last six months:
|No||Month & Year||Diesel Price Per Litre (INR)||Increase / Decrease Amount|
|1||January 2018||61.47||+1.55 rupees|
|2||December 2017||59.92||+1.26 rupees|
|3||November 2017||58.66||-0.54 rupees|
|4||October 2017||59.20||+1.8 rupees|
|5||September 2017||57.40||+1.55 rupees|
|6||August 2017||55.85||+1.53 rupees|
How Dynamic Fuel Pricing Affects The Diesel Rates In Gurgaon?
The mechanism of the so-called “dynamic fuel pricing” has been in trend since the time it was introduced. It assists in revising the fuel rates on a day-to-day basis in synchronization with the CER (Currency Exchange Rate), crude oil or unrefined oil. This revision in the price is done every day at 6.00 AM (Indian Standard Time).
Therefore, it is always vital to check the diesel prices before filling your vehicle. As far as Gurgaon is considered, all the diesel stations are following the concept of dynamic fuel pricing since June 16, 2017. In fact, not only Gurgaon but this scheme has been implemented throughout the country in every region.
The primary objective of “dynamic fuel pricing” is to bring transparency in the fuel rates so that the governments cannot affect or influence the OMCs (Oil Marketing Companies). Besides this, the variations in the crude oil price and INR – USD exchange rate can be transmitted easily to the consumers. In addition, dealers can manage their working capital and stocks more efficiently.
Why Is The Dynamic Fuel System Better Than The Prior?
Before 16 June 2017, both diesel and petrol rates were revised on a fortnight basis. This completely was based on the fluctuations occurring in the international crude oil market and the country’s supply/demand factor.
However, with the daily dynamic version, oil marketing companies have stated that this everyday revision has not only brought a better transparency in the system but also minimizes the effect of increasing/decreasing rates on the capitalization of dealers and companies.
Above all this, this system is practiced in almost all the developed countries, even including the U.S. and other European nations. Since India has now switched to a fresh regime for fuel, the probability of implementing the system to other petro-products like kerosene, cooking gas, and motor oil are certainly high but when and how only time can answer.
How GST Affects The Diesel Prices In Gurgaon?
After the recent statement given by Dharmendra Pradhan, Oil Minister of India, that the GST council must consider incorporating the highly-consumed petroleum products with GST, a lot of questions have been asked by the consumers if this concept will be accepted by the Indian Government or not.
Well, according to the market watchers, if the government plans to go ahead with Mr. Pradhan’s idea, there will certainly be a sheer fall in the overall prices. Apart from this, duties and taxes will also surpass the actual production cost of diesel. More than that, the retail cost for a litre of diesel will also exceed.
Let’s comprehend this with an example. Assume that the government brings the diesel price under 12% GST. Then, this will be sold for about 31 rupees in Delhi. If it is 18% GST, then the diesel will cost about 33 rupees, and at 28% GST, it will be 37 rupees.
Note: The above GST calculation is for Rs. 58 to 59 per litre of diesel and is just an example.
Diesel Price Comparison
The diesel rate varies from one Indian city to the other and this is primarily due to the taxes levied. However, if a metro city like New Delhi is considered, the fuel rate is comparatively lower than the others. In Mumbai, the fuel charges are the highest because of the local or domestic tax. But, this is not static.
Diesel Price: The International & Domestic Market
International Market: The diesel price throughout the world is $1.01 per litre on an average. Nevertheless, there is a substantial variation in the rates among countries. Generally, the richer countries will have a higher price while the poorer ones and the ones that produce as well as market overseas will have a significantly lower price. However, there is one exception with the United States gas prices though. They are significantly low.
The price difference in diesel across major countries is mostly due to the subsidies & taxes. Every country accesses the same fuel rates of the international market but what distinguishes is the tax imposed on them. That’s how a country’s retail diesel price differs.
Domestic Market: The average diesel price in India (considering the past decade) is 46.2 rupees per litre. However, there has been a vast difference from the years: 2014 - 2017.
What Factors Make The Diesel Prices To Rise?
We see the diesel price often rising every now and then. But, ever wondered what makes the Indian government to either raise or reduce the fuel rates? A common cliché associated with it is that the Indian government or the oil companies do this out of greed or to make more money. However, this is not true.
Even though democracy offers us all the rights to form and speculate opinions, it is essential to adopt objective perspective and focus on facts. Considering this, here are a few factors that actually affect the diesel prices and how a country’s government has to forecast the new rates based on them.
Understand that fuel is a common international commodity and the prices can be easily influenced in one country just because the demand has suddenly raised somewhere else. Though the reasons listed below are related to global fuel rates, they have a good bearing on India too.
As said above, when the demand increases, the price also goes up. This applies to all commodities in the world. Hence, diesel is no exception. When compared to petrol, the price of diesel is relatively low and this is a key reason commuters prefer using diesel-based vehicles. This again increases the demand for diesel in developing countries like India and even developed countries like the United Kingdom, United States, China, Europe, and Canada.
Consider United States for example. In the last couple of years, the U.S. saw about 40% - 50% new registrations on diesel vehicles. On the other hand, progressing economies like India and China saw a substantial rise in the overall sales of diesel vehicles by 30%.
Weather can leave a big impact on both diesel and petrol. In summers, the demand for fuel can substantially increase all over the world and that’s because people tend to go on vacations. So, the more the travel (via airlines, powertrains, road vehicles, etc.), the more the need for oil.
As a general rule, whenever there is a demand, the price of any commodity increases automatically. Winter, on the other hand, has a similar impact on the fuel demand. Although this might not apply to India, other foreign countries will have an increased use of heaters and other appliances, making the demand for diesel even more. That’s how both demand and the rates spike up.
The transportation cost is yet another important factor that affects a country’s diesel price. It is the cost required to cover the distance from a retail location to a supply source. While the regions situated far from the Gulf Coasts tend to have high diesel prices, the ones close by will have less.
4. Global Factors
The primary component required to produce diesel is crude oil. Since it is an important international commodity, even a slight decision taken towards it will leave an influence on countries like China, United States, and the Middle East.
For instance, about a decade ago, the United States decided to use ULS (Ultra-low Sulphur) fuel. However, the cost to convert diesel to sulphur fuel is extremely high and as a result, it hiked the diesel price.
FAQS On The Indian Fuel Prices
Here are a few questions that are commonly asked by the consumers on the fuel price:
- What Determines The Retail Price Of Diesel?
There are 4 important cost components that go in while determining the diesel’s retail price:
- Cost of the crude oil: Crude oil is globally produced from different locations like oil wells, shale fracturing of oil, ocean wells, and tar sands. Now, the production cost for one barrel differs from somewhere around $20 (if it is produced from the deserts of Saudi Arabia) to $90 (if it is produced from deep-water wells).
- Cost of refining: This is the cost taken to refine the crude oil to diesel and gasoline. The refining cost depends on the specifications of the final product and the additives that go in while enhancing it. These additives increase the refining cost and vary from $0.40 to $0.70 for each gallon. The overall cost of refining diesel is about $0.49 for a gallon.
- Cost of distribution and marketing: This is the cost that includes transportation of diesel from the respective refineries to the destined petroleum racks throughout the country. The mode of transportation usually includes pipelines, trucks, ships, and railcars. The retail cost comprises of utilities, petroleum equipment, and labour.
- The tax levied on both national & state levels: This is the duty used for building and repairing highways, roads at both state and national levels. The tax on diesel is much higher ($0.52 for a gallon) because a fuel like diesel is utmost consumed by the heavier trucks, causing more wear & tear than others.
- What Controls The Indian Pump Prices?
Both diesel and petrol rates are deregulated by the Indian Government. Though this varies, the pricing decision is calculated based on various factors like:
- The cost to bring the diesel or petrol to the site.
- The cost to run the entire service station (example: rent, utilities, salaries, etc.)
- Why Are Diesel Prices High Compared To The Previous Years?
The difference in the diesel prices are most of the time increased when compared to the previous years, and this usually happens when there is a rise in:
- The cost of the refined product.
- The cost of the crude oil.
This is also influenced by various other factors like:
- An increase in oil demand
- Seasonal demand
- Unexpected climatic events that affect the fuel supplies or refineries
- Limits in the refining capacity
- Why Diesel Prices Differ In Each Country?
The price of diesel differs from one country to the other and is usually affected due to the following reasons:
- Urgency fluctuations
- Tax rates
- Government subsidies on the diesel
- Government excises
- Cost to buy the finished product
- How Does The U.S. Exchange Rate Impact On The Country’s Diesel Price?
Since the majority of the world’s crude oil industry is traded in USD (United States Dollars), even a slight difference between a nation’s exchange rate and USD will affect the cost of crude oil.
Directionally, the concept of dynamic fuel pricing has brought higher transparency in the system. However, if India steps into free pricing, a majority of the OMCs (Oil Marketing Companies) and dealers will have the option of pricing their products based on the market competition.
While the private-sector firms in a few cases offer diesel and petrol at a competitive rate, this will certainly progress the public sectors to offer lower rates just to attract the customers.
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