Diesel Price in Karur
The city of Karur is situated on the banks of River Amaravathi in the State of Tamil Nadu. The city is presently famous for its cotton textile industries and is a booming trade centre in the State. Apart from textile industries, Karur is traditionally looked to agriculture to aid its economy. The city well connected by road, rail and air. The residents of Karur depend largely on public transport, while two-wheelers and four-wheelers also constitute the main part of the city’s vehicle density.
The city and its districts are spread over an area of approximately 2,856 sq.km. with a population of more than 10 lakh recorded as of 2011. With increasing population, the density of vehicular traffic has increased as well. Fuel consumption has surged and the city is dependent on fuel for its transportation and its economy.
The diesel price in Karur is revised on a daily basis similar to other cities in the country. The price for a litre of diesel includes several factors and it becomes challenging to understand how the diesel price is computed. Below is a detailed analysis of various factors which influence the diesel rate in Karur.
Factor Influencing the Diesel Rate in Karur
The diesel rate in Karur constitutes of different external and internal factors. While the external factors include the crude oil price and the exchange rate of the US dollar, the internal factors include taxes, profit margins of oil companies, and dealer’s commission. Let’s review them in detail.
- Global Crude Oil Price: More than 70% of the country’s crude oil requirement is imported from the international market. India buys the crude oil on the basis of the Indian Basket index. The Indian Basket or the Indian Crude Basket index or price is the cost of crude oil imported by State-owned Oil-Marketing Companies (OMCs), which forms the base price of diesel. The global crude oil price in dynamic in nature and changes constantly depending on multiple elements such as demand and supply pattern, geopolitical reasons, seasonal variations, production cuts by oil-producing countries, etc. The current diesel price in Karur is calculated based yesterday’s cost of Indian Basket price.
- USD Exchange Rate: Trading of crude oil typically happens in US dollars. OMCs purchase the crude or unrefined oil in US dollars, therefore, any fluctuations in the exchange rate directly impact the diesel price in Karur and other cities in India. Any rise in the US dollar value will increase the diesel rate and any fall in the value will drop the price of diesel in India.
- Centre’s Excise Duty on Diesel: The Government of India levies excise duty on every litre of diesel sold in the country. Currently, the excise duty on diesel stands at Rs.15.33 per litre across all states. The last time the central tax was changed was announced in February 2017, when the excise duty was cut by Rs.2 for a litre of diesel or petrol.
- State’s Value Added Tax (VAT) on Diesel: The State government of Tamil Nadu collects VAT a litre of diesel sold in the State. Currently, the State government levies a VAT at 24% for every litre of diesel sold across the State. Since Karur comes under the administration of the Tamil Nadu State Government, the VAT on Diesel in Karur remains the same as other cities in the State.
- State-owned Oil-Marketing Companies’ Profit Margin: The Indian OMCs transport crude oil from the foreign land to India. This leads to cost in transportation, marketing, refining the crude oil, etc. which affects the price of diesel sold in Karur. Whenever there’s a change in the profit margin, fuel prices are revised accordingly.
- Commission for Dealers or Petrol Pump Owners: Diesel dealers or fuel station owners purchase fuel from oil companies and dispense it in their respective petrol pumps. Apart from selling it to the consumers, dealers maintain the fuel station, transport fuel from oil-refineries, therefore, they add all these costs before selling diesel at the retail selling price. Usually, the dealer commission is decided by the oil companies and is revised once a year.
Calculation of the Diesel Pricing in Karur
Now that we know the important factors which influence the diesel price, let’s take an example to understand the breakdown of diesel pricing in Karur. The below pricing is based on the rate of diesel as on 20 May 2018.
|1||Global crude oil price + ocean freight charges||$72.50 per barrel = Rs.31.17/Litre (considering $1=68.36 and 1 barrel oil = 159 litres)|
|2||Oil company’s profit margin, transportation, refining and freight cost||Rs.8.61/Ltr|
|5||Value added tax (VAT)||Rs.17.65/Ltr|
|Total||Retail selling price of diesel in Karur||Rs.71.71/Ltr|
Frequently Asked Questions (FAQs) on Diesel Price in Karur
- Why does diesel price in Karur differ every day?
Since the diesel price is computed based on the new ‘dynamic fuel pricing’, the rate for a litre of diesel is revised every day. As per the new pricing mechanism, diesel prices will be updated daily at 6 a.m. every day by considering the previous day’s crude oil price and the foreign currency exchange rate.
- Why is the diesel cost in Karur different from one dealer to another?
The diesel rate in Karur differs from one dealer to another due to the difference in dealer’s commission. The difference is based on the transportation and the cost to maintain the fuel stations. Petrol pumps situated closer to refinery charge less compared to those located far from the stations.
- What is the Goods and Service Tax (GST) on diesel sold in Karur?
The Goods and Service Tax (GST) is the new taxation system introduced by the Indian Government. All commodity trading and services come under the framework of the GST. However, petroleum products have been kept away from attracting the GST. The highest tax slab under the new tax regime is 28%, while the current taxes on fuel is much higher, hence, by bringing diesel under the GST would affect the revenue of both the Centre and the State. Thus, the diesel sold in Karur does not attract or come under the ambit of the GST.
- How to Check Daily Diesel Price in Karur?
With diesel prices being revised on a daily basis, OMCs have come out with multiple methods to track the diesel price in the city. From mobile apps to SMS service, one can find the current rate of diesel. Below are various initiatives taken by the OMCs find the price for a litre of diesel.
- Mobile Apps: IOCL customers can download and install the ‘Fuel@IOC’ app to check the daily diesel price, BPCL customers can install the ‘SmartDrive’ app, while customers of HPCL can check the daily rate vai the ‘MY HPCL’ app.
- SMS Service: For those who like to take advantage of the SMS service, below is the process for your reference.
- IOC: SMS RSP
dealer code to 9224992249.
- BPCL: SMS RSP
dealer code to 9223112222.
- HPCL: SMS HPPRICE
dealer code to 9222201122.
- IOC: SMS RSP
Additionally, customers can check daily diesel price through the respective OMCs online portal or website.
*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.