Diesel Price/Rate in Kerala Today

Several factors determine the final retail price of diesel in Kerala. The price you pay at the pump is a combination of the base price of the crude oil, central and state government taxes, and dealer commissions.

Some of the factors that are considered are mentioned below:

• Crude Oil Cost: India imports over 85% of its crude oil, making international oil prices a major factor in domestic fuel costs. Fluctuations in the global market, geopolitical events, and currency exchange rates all impact the price of crude oil.

• Central Government Taxes: The central government levies excise duty on diesel.

• State Government Taxes: The Kerala state government imposes a Value Added Tax (VAT) on diesel.

• Dealer Commission: Oil marketing companies (OMCs) pay a commission to the petrol pump dealers, which is also factored into the retail price.

Why do Diesel Costs fluctuate in Kerala?

The factors that affect diesel prices in Kerala can be clubbed into two categories. The first category includes domestic factors and the second category includes international factors.

The tax components can be considered as domestic factors. The central government retains the right to decrease or increase the central excise duty.

Another tax component is the state VAT, which is administered by respective state governments. The cost of diesel will come down if the state government of Kerala reduces the VAT on diesel. It will go up if the local tax increases.

The cost of crude oil and the currency conversion rate can be considered as international factors. Crude oil rates are impacted by a lot of factors including overseas political events, the economics of oil-producing countries, export and import procedures, the ratio of global reserves and supplies, and seasonal conditions.