Diesel Price in Kakinada
Diesel-run vehicles are gaining demand nowadays in Kakinada, a notable city in Andhra Pradesh. The fuel consumption is increasing steadily as a result in the city, which also consumes diesel in a large scale. If the fuel accumulates or loses demand domestically, the fuel price will not be impacted. Conversely, if diesel loses or accumulates demand internationally, the diesel price will be impacted in all Indian states, including Andhra Pradesh. If you notice the latest diesel rate in Kakinada, you can see it changing every day.
|Also Know: Petrol Price In Kakinada|
Interpreting Historical Diesel Rates in Kakinada
Diesel prices in Kakinada were on the rise in March 2018. During the last week of March 2018, the average fuel price in the city was Rs.70.50 per litre. The fuel was priced at Rs.71.45 per litre by Indian Oil (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) on 1 February 2018. At the beginning of March 2018, the fuel was priced below Rs.70 per litre. The Retail Selling Price of diesel, which is quoted to fuel consumers finally, will consist of central taxes and local taxes. On diesel, in Kakinada, a central tax of Rs.15.33 per litre is levied. VAT (Value-added Tax) is charged at 30.86% by the State Government of Andhra Pradesh as of March 2018.
Analysis of Central and State Taxes in Kakinada
The central tax is imposed and governed by the Central Government. On diesel, it was Rs.3.46 per litre in the month of November 2014. It increased to Rs.17.33 per litre after three years. In February 2018, it reduced to Rs.15.33 per litre. The BJP-government, since it came into existence, revised the excise duty 9 times. The revisions were made in October 2017 and February 2018 recently. The Value-added Tax was cut recently in Maharashtra, Gujarat, Uttar Pradesh and Madhya Pradesh in October 2017, but not in Andhra Pradesh.
Dynamic Fuel Pricing vs Today’s Diesel Price in Kakinada
Do you know how diesel is priced today in Kakinada? Daily fluctuations in crude oil rates and the rupee-dollar value are taken into account to determine and update the current diesel rate in Kakinada. This fuel revision is called dynamic fuel pricing or the daily price revision system. The revised fuel rate should be released at 06:00 a.m. each day. Fuel consumers may anticipate a price hike or a price drop or the same price. So, you have a new price each day.
Why Dynamic Fuel Pricing?
Dynamic fuel pricing provides several benefits to oil companies, fuel buyers, fuel dealers and the government. It addresses the problems associated with the previous fuel reviewing mechanism, which was used for more than 15 years in India. Consumers will no longer face the deficit of stocks and are marked to real-time market performances. Neither the State Government of Andhra Pradesh nor the Central Government of India can influence the revision of fuel prices in the city. Put simply, dynamic fuel pricing brings complete transparency and allows oil companies, including Indian Oil, Bharat Petroleum and Hindustan Petroleum, to deteriorate the investment and time needed to maintain regular business operations.
Latest Diesel Price in Kakinada – How is that computed?
We need to first understand the participants in the fuel retailing industry. The prime stakeholders include OMCs, fuel dealers in Kakinada and oil exporting countries. In India, there are three publicly-owned oil entities. They play a significant role. First, crude oil is bought by them by paying price in dollars. They will then refine it at refinery centers. The refined oil will be sold to local dealers who finally distribute it to consumers. At each production phase, expenses are spent by OMCs. The following are the prime elements of the current diesel price in Kakinada:
- Refinery Transfer Price: The Refinery Transfer Price (RTP) is the sum of crude oil prices, freight expenses and refinery expenses. It is alternatively defined as the price remitted by OMCs such as Indian Oil Company, Bharat Petroleum and Hindustan Petroleum to refineries.
- Retail Selling Price: The Retail Selling Price of diesel in Kakinada shall be computed based on many aspects. Every fortnight, the average rate of unrefined oil of the Indian basket is assessed. The RSP is computed in US dollars.
- Taxes: We have discussed this point in the previous section. Both the local and central taxes will be supplemented to the fuel rate, which is quoted to fuel dealers in the city.
Influencers of Current Fuel Prices in Kakinada
- Domestic factors: The domestic factors that impact the diesel price in Kakinada include the commission charged by retailers, the VAT in Andhra Pradesh and the excise duty. The fuel price will increase if the VAT, the central levy and the dealer’s commission increase and vice versa.
- International factors: The international factors that influence the diesel rate in Kakinada include crude oil costs in foreign markets, the conversion rate of the INR against the USD, the present and anticipated demand of the fuel at a global level, the political trends in both oil importing and exporting countries, etc.
Does the GST system affect the Diesel Price in Kakinada?
The Goods and Services Tax, the present tax system in India, does not impact the diesel price in Kakinada as diesel has been excluded from the GST purview. But, it has been levied on other types of commodities and services. The entire oil and natural gas industry is negatively affected by the current tax platform. The compliance cost shall be doubled since the oil and natural gas industry has to adhere to the GST tax framework and the existing tax system.
Moreover, the imposition of the GST on the oil and natural gas industry shall result in non-credible expenses. Upstream companies shall also be adversely affected. As far as the utility segment is concerned, gas sellers shall face the difficulties since they have to pay the GST on transmission charges. Should the GST be levied on diesel? It can be levied. In fact, many consumers prefer this move. The final decision has to be taken by the Council members.
Also Check Diesel Price in NearBy Cities of Kakinada
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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.