Diesel Price In Karnataka Today

Diesel Price in Karnataka

Karnataka, the south western state in India, is the eighth largest state by population. The state is a land of many tourist destinations hence attracts many tourists from across the country every year.

Bangalore, officially known as Bengaluru, is the capital and largest city in the state. Other major cities in the state include Manipal, Mangalore, Mysore, Gulbarga, Bijapur, Raichur, Belgaum, to name a few.

While agriculture is the primary occupation in the state, the state also hosts some of the largest public sector industries in India. Of-late it has emerged as the pan-Indian leader in Information Technology (IT) with more than 2,000 firms located in the major cities of the state.

People from different ethnic groups from across the country live in the state. The population of the state is rising steadily with more and more people moving to the state.

With the increasing number of people is the increasing number of private vehicles plying on the state roads. According to the Karnataka state transport government, the number of public transport vehicles in the state are decreasing while the number of private vehicles is increasing at an alarming rate.

Cars form major part of private vehicles compared to two wheelers as the number of new car registrations are increasing every year.

In an effort to decrease the dependency on fossil fuels and to reduce pollution levels, Karnataka became the first Indian state to roll out Electric Vehicle and Energy Storage Policy, in line with the Indian government’s vision to make the country an all-electric vehicle market by 2031.

With the state’s vehicular traffic primarily composed of private vehicles such as cars and public vehicles like buses which rely on diesel, the demand for the fuel is high in the state. However, due to less amount of tax levied by the Karnataka on diesel, the diesel price in the state is less compared to other states, which charge a bit higher tax.

Also Check: Diesel Price in Bangalore

Factors Affecting Diesel Rate in Karnataka

Just like in other Indian states, diesel rate in Karnataka is affected by various factors which are part of diesel pricing.

Diesel pricing includes not just the product price but a few other elements including the state and central government taxes, transportation and freight charges, dealer’s and oil company’s commission and other charges like surcharge and cess.

Of all the components, major factors that affect the diesel price in Karnataka or in any other Indian state are the international crude oil price, US dollar to rupee exchange rate, and state and central government taxes.

India imports most of its fuel requirements from other countries as the existing resources in the country are not sufficient to cater the increasing demand for diesel.

Hence, the journey of diesel begins with the oil marketing companies such as Indian oil, Hindustan Petroleum and Bharat Petroleum, purchasing crude oil from the international oil companies.

As the rate of the crude oil is most likely to change on a daily basis, every slight change in the crude oil price in global markets would impact the selling price of diesel in India.

Secondly, as oil trading typically happens in US dollars the change in dollar to rupee exchange rate also impacts the price of diesel.

The third component is the tax levied on diesel. To everyone’s surprise, taxes levied on diesel constitute more than 50% of its price. Which means if you are paying Rs. 60/Lt of diesel, you must be paying more than Rs. 30 to the respective state and central governments as taxes.

On a daily basis, however, the state and central taxes remain the same. Any hike or reduction in tax rates would directly impact diesel price. For instance, if Karnataka government cuts the value added tax on diesel, the price of diesel in Karnataka will come down and vice versa.

Other factors that could marginally impact diesel price in the state are dealer’s commission and freight charges involved in transporting the fuel to the fuel stations.

Quarterly Diesel Price Trend in Karnataka between July and September 2018

Diesel Price Trend in Karnataka in July 2018

• Similar to petrol, diesel prices in Karnataka and other states are revised on a daily basis under the dynamic fuel pricing mechanism by State-run oil companies.
• The retail selling price of diesel in Karnataka is arrived after considering the global crude oil price and the exchange rate of the rupee over the U.S. dollar.
• Based on the daily revision, the diesel price in Bengaluru, the capital of Karnataka, stood at Rs.68.35 per litre. This was also the lowest diesel price registered during the month in the State.
• Prices were kept unchanged until the 5th of July before increasing it by 12 paise per litre on the 6th, when a litre of diesel was sold at Rs.68.47.
• After relentless hikes, diesel prices rose to its highest to stand at Rs.70.74 per litre on the 14th of the month due to the incline in oil prices in the international market.
• The increase in oil prices is attributed to geopolitical tensions of a possible trade war between the U.S. and China.
• Despite diesel prices declining over the course of the third and fourth week, it was higher than the opening price of the month.
• On the 31st, the diesel price in Karnataka stood at Rs.70.01 per litre, an increase of Rs.1.66 per litre when compared to the opening price.
• During the course of the month, diesel prices in Karnataka grew by 2.43% influenced by the increase in the global crude oil price.

Diesel Price Trend in Karnataka in August 2018

• Oil companies cut diesel prices in Karnataka on the 1st of the month by 4 paise per litre to stand at Rs.69.97 - the lowest price recorded during the month.
• During the course of the first and second week, fuel prices including that of diesel continued to incline and by mid-August, prices had gone up by nearly a rupee.
• There was no respite to the common man as oil companies hiked diesel prices relentlessly in the back of an increase of oil prices in the global market.
• The increase in crude oil prices was due to geopolitical tensions between the U.S. and China even as they imposed trade sanctions on each other.
• By the end of the third and fourth weeks, diesel prices in Karnataka inclined to touch Rs.72.46 per litre, the highest diesel price registered during the course of the month.
• During the month of August, the diesel price trend in Karnataka was upward with 3.63% rise in prices when compared to the opening price of the month.
• The upward trend was attributed to the increase in the global crude oil price prompting oil companies to pass on the increase to consumers.

Diesel Price Trend in Karnataka in September 2018

• On the 1st of September, the diesel price in Bengaluru stood at Rs.72.71 per litre, an increase of 25 paise compared to the previous day’s rate. This was also the lowest price of the month in Karnataka.
• Prices continued to rise unabated for until the 17th of the month before the State government announced a cut of Rs.2 per litre on both petrol and diesel in the state.
• With the cut in taxes levied on diesel, a litre of the fuel was sold at Rs.74.25 on the 18th, a reduction of Rs.1.91 per litre offering some relief to consumers in the State.
• Karnataka joined other states such as Rajasthan, West Bengal and Andhra Pradesh in reducing State taxes charged on the sale of diesel.
• However, the rise in crude oil prices coupled with the significant fall in the Indian currency’s exchange rate continued to hurt the diesel price in Karnataka even as it wiped out the cut of Rs.2 per litre on diesel by the State government.
• While oil prices shot up to touch a four-year high of $80 per barrel, the rupee fell to its lowest of 72 over the U.S. dollar.
• By the end of the month, diesel price had gone up and was retailing at Rs.75.17 per litre on the 30th of the month.
• Overall, the diesel price trend in Karnataka in September grew by 3.38% influenced by the rise on crude oil prices and the steep fall in rupee over the US dollar. The upward trend could have been much higher if not for the cut in taxes announced by the State government.

Quarterly Diesel Price Trend in Karnataka between April and June 2018

Diesel Price Trend in Karnataka in April 2018

• Across all the fuel stations in Karnataka, diesel was offered at a price of Rs.65.67 a litre on 1st. This price was determined based on dynamic fuel pricing, which is a recently adopted system for updating the prices of both diesel and petrol.
• Fuel rates during the first week of this month were not steady. They were revised to Rs.65.81 a litre n 2nd and were further increased to Rs.65.95 a litre on 3rd and 4th.
• Crude oil rates and the exchange rate, the two important global aspects determining the value of diesel per litre in the domestic market, have pushed diesel rate per litre to Rs.66.11 by the end of the second week in major cities of Karnataka, including Bangalore.
• In this month, neither the State Government of Karnataka nor the Central Government has affected the revision of the fuel price.
• Put alternatively, excise duty, which is imposed by the Central Government, was not changed; and VAT, which is levied by the State Government of Karnataka, was also not changed in April 2018.
• Caused by the increased rate of crude oil per barrel, diesel rates in the state of Karnataka were soared by 2.10%.

Diesel Price Trend in Karnataka in May 2018

• For the first eleven days of May 2018, the fuel was marketed at a constant rate of Rs.67.05 a litre in Bangalore, the capital city of Karnataka. The fuel rate was also constant in other state capitals.
• Oil-exporting economies have started increasing crude oil prices considering the increased demand for crude oil in overseas markets. As a result, diesel rates in all prime cities of Karnataka have moved upwards until the end of May 2018.
• Like April 2018, domestic influencers such as Value-added Tax and excise duty were retained unchanged in May 2018 also.
• Moreover, the profit margin of Oil Marketing Companies (OMCs), the expenses incurred by OMCs and the commission charged by fuel dealers in Karnataka were not revised in this month.
• The exchange rate, which is one of the important factors impacting the price of diesel, was reported to be highly volatile. But, the impact of the INR/USD exchange rate was nominal.
• The growth rate of diesel prices in the state of Karnataka was reported to be 5.11% in June 2018. Indian Oil has confirmed that the highest diesel rate for the month stood at Rs.70.54 a litre.

Diesel Price Trend in Karnataka in June 2018

• State-run fuel enterprises such as Bharat Petroleum, Hindustan Petroleum and Indian Oil have reviewed the value of the fuel under dynamic fuel pricing throughout the quarter.
• Unlike the first two months, diesel prices in prime cities of Karnataka such as Bangalore, Mysore, Hubli and Belgaum have fallen steadily in June 2018.
• On 1st, the fuel price was revised to Rs.70.43 a litre. It was further slashed to Rs.69.95 a litre on 7th and Rs.69.02 a litre on 14th considering the changes in the crude oil rate per barrel.
• It was finally confirmed by oil marketing companies that fuel rates in Karnataka were down by 2.95% in June 2018. It was not because of domestic influencers such as excise duty and Value-added Tax but because of international unrefined oil prices.
• Between April 2018 and June 2018, the fuel was sold at the highest rate of Rs.70.43 a litre on 1st June and was sold at the lowest rate of Rs.65.67 per litre on 1st April.
• Fuel companies have also confirmed that diesel rates in the state were up by 4.08% during the second quarter of the year.

Trend in Diesel Price in Karnataka between January and March 2018

Trend in Diesel Price in Karnataka in January 2018

• Diesel reached a price mark of Rs.60.76 per litre in Bangalore and Belgaum, the two premier cities in Karnataka, as of 1st according to the daily revision framework.
• Fuel consumers may observe a slight variation in the fuel rate from city to city. The longer the distance covered from supply stations to fuel stations, the higher will be the transportation cost and vice versa.
• Because of this reason, the diesel rate in Belgaum and Hubli is slightly higher than that of in Bangalore.
• In tandem with overseas crude oil prices and the exchange rate of the INR versus the USD, the average diesel price in Karnataka produced a stable rise. It was Rs.60.83 per litre in the first week and increased further to Rs.62 per litre in the second week.
• Like other states such as Tamil Nadu, West Bengal and Maharashtra, all the three publicly-run fuel companies reported the highest rate to be Rs.60.58 per litre on 31, the last day.
• Finally, a 0.20% drop in the value of the USD against the Indian currency and a 7.65% growth in the cost of crude oil have produced a 4.32% growth in the diesel price in the entire Karnataka this month.

Trend in Diesel Price in Karnataka in February 2018

• Considering the movements in the global factors, petrol was sold with a price range of Rs.65.17 per litre on 1st throughout the state, but the offer remained unaffected by the avowal of the BJP-led Government’s Union Budget.
• Since crude oil retained the same level of demand globally, the diesel prices in Karnataka have increased by 0.16% in the first week. In sync with the falling demand in the second, third and fourth weeks, the OMCs commenced deteriorating the offer.
• As a result, the fuel rate was down 1.11% to Rs.64.55 per litre on 14th, 1.89% to Rs.63.33 per litre on 21st, and 0.25% to Rs.63.17 per litre on 28th.
• No other global and indigenous forces should be accounted for this fall. To make it clear, both the state-level and central-level taxes had been stable. Globally, neither a fabrication cut nor a poor weather report was announced.
• In the end, the month produced a 3.06% tumble in the fuel prices prompted by a 1.36% fall in the USD/INR conversion rate and a 5.24% fall in the crude oil rate.
• Not only in Karnataka but also in other states such as Maharashtra, Delhi, Tamil Nadu and West Bengal, the fuel exhibited a combined response.

Trend in Diesel Price in Karnataka in March 2018

• As envisioned, the opening day rate climbed by 17 paise per litre in all parts of the state under the dynamic fuel pricing structure. Experts have beckoned a reasonable upsurge.
• On 6th and 7th, an offer of Rs.64.07 per litre was made whereas on 13th and 14th an offer of Rs.63.95 per litre was made by HPCL, Indian Oil and BPCL.
• For the residual 27 days, the diesel rates were not decreased but were increased gradually based on the crude oil market and the performance of the currency translation ratio to some extent.
• The crude oil’s price increased to $61.95 per barrel on 8th, $62.04 per barrel on 14th, and $66.80 per barrel on 26th. One barrel is equal to 159 litres.
• Influenced by this constant upswing in the cost of unrefined oil, diesel touched a price mark of Rs.64.12 per litre on 23rd, Rs.64.50 per litre on 25th, Rs.64.89 per litre on 27th, and Rs.65.49 per litre on 31st in the state.
• The lowest price for the whole quarter was reported at Rs.60.76 per litre in January whereas the highest price at Rs.65.49 a litre in March.
• Throughout the quarter, the Central Government charged the excise duty of Rs.15.33 on diesel per litre. Moreover, the VAT in Karnataka was retained unchanged at 18.25%.

Diesel Price in Karnataka Compared to Other States

Compared to other south Indian states such as Andhra Pradesh, Telangana, Kerala and Tamilnadu, the state of Karnataka offers diesel at the lowest price considering the rates in the state’s capital city, Bengaluru.

The less diesel price in Karnataka is attributed to the low value added tax (VAT) charged by the state government compared to the tax charged by rest of the south Indian states governments.

State Taxes and Diesel Price in Karnataka

As discussed earlier, state taxes form a major part of the diesel price in Karnataka. Even though that state charges less tax compared to other south Indian states, VAT is one component that significantly affects diesel price in the state.

As of 5 October 2017, the Karnataka state government levies 19% VAT on diesel compared to 30.82%, the highest tax, levied in Andhra Pradesh.

Earlier, the government used to charge entry tax of 5% on diesel, which was abolished in July 2017. With that diesel price in Karnataka has come down, compared to other south Indian states, some of which still charge entry tax.

How Often Diesel Prices are Revised in Karnataka?

Diesel prices in Karnataka, just like in any other Indian state, are revised on a daily basis since the dynamic fuel pricing has been introduced in India in June 2017.

Dynamic fuel pricing or daily revision of fuel prices is to ensure the retail selling price of diesel in India is in sync with the global crude oil prices. As the global crude oil prices fluctuate on a daily basis, even the slightest drop in the oil price would reach the end customer through dynamic fuel pricing. Further, it will bringing transparency in diesel pricing in India.

Prior to dynamic pricing, the diesel prices in Karnataka, similar to all other states, were revised fortnightly based on the average price of the previous 15 days.

As per the new dynamic pricing model, all the petrol pumps in Karnataka will update the revised diesel price every day by 6 a.m. and will display the same at the fuel stations.

Petrol pumps in Karnataka include both automated and non-automated fuel stations. While the automated stations which are centrally controlled will get an automatic update of diesel prices, the non-automated stations will do it manually.

The oil marketing companies including Indian Oil, HP and BP have made the revised diesel prices available on their respective websites.

Consumers can also download the mobile apps of the oil companies to know the daily revised diesel price in their cities. For petrol pump specific rates, they may have to send an SMS with the dealer code, which is available at the pump, to the company provided numbers.

Effect of GST on Karnataka Diesel Price

GST or goods and services tax came into effect on 1 July 2017 in India. The new tax regime, which is deemed as a major reform in the country’s financial sector, abolished a variety of taxes levied by state as well as central governments on most of the products and services.

The prices of many goods and services got affected with the implementation of GST both positively and negatively. However, GST has a zero effect on diesel and other petroleum products, as they are currently kept outside the purview of the tax. In other words, diesel is exempted from GST and is being taxed as per the old norms.

The central and the Karnataka state government still collect the taxes on diesel individually. Therefore, as of now there is zero effect of GST on the diesel price in Karnataka.

If diesel is brought under GST, its price may either go up or come down based on the tax bracket it belongs to. Currently, the tax slabs under GST are 5%, 12%, 18% and 28%. The diesel price in Karnataka will come down only when diesel is brought under a tax slab which is lesser than the current taxes (state + central) levied on the commodity.

Diesel Rate versus Petrol Rate in Karnataka

Diesel price in Karnataka, just like in other Indian states, is lesser than petrol. The primary reason for the price difference is the variance in the taxes charged on each of the commodities.

For instance, central government levies an excise duty of Rs. 15.33 on a litre of diesel, whereas it collects Rs. 19.48/Lt on petrol. Similarly, VAT levied on diesel in Karnataka in 19%, while it is 30% on petrol. The difference in the tax rates converts into price difference between diesel and petrol.

The average price difference between diesel and petrol in Karnataka in Rs. 12-13 per litre.

Also Check Diesel Price in NearBy Cities of Karnataka

*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.

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