Diesel price in Kerala today is fixed based on the daily ‘Dynamic Fuel Pricing’ mechanism. You can check the current diesel price in Kerala, find today's diesel price and the quarterly price trend in Kerala. It may be noted that new diesel prices in Kerala are updated by state-run oil firms daily at 6:00 am IST.
Find out how diesel prices in Kerala are computed and how are prices compared to other states. Also, find the current Kerala diesel price and important factors affecting diesel prices in India. Also, you can find the highest and lowest price recorded in Kerala during a month.
Diesel Rate in Kerala:
The present financial year has seen tremendous changes with respect to diesel, which is an efficient, multi-purpose liquid fuel. The demand for diesel is mounting day by day in the country, so does with Kerala. The following sections discuss a few important aspects related to diesel from the viewpoint of a common diesel consumer from Kerala.
Trend of Diesel Price in Kerala for August 2019 (rates per /litre ):
|Highest Rate in August||Rs.70.97 on 4, 5, 6 and 7 August|
|Lowest Rate in August||Rs.70.05 on 20, 21, 22, and 23 August|
Monthly Diesel Price Trend in Kerala for August 2019:
- The diesel price in Kerala opened the month of August at Rs.70.96 per litre, unchanged from the previous day’s closing price. The rates increased slightly to Rs.70.97 per litre on 4 August. This was the highest recorded price for the month.
- With low demand for oil in the local market and the trade war between the United Stated and China, the rates plummeted and stabilised on 12 August at Rs.70.38 per litre.
- With no improvement in the trade relations between Washington and Beijing, the concerns regarding an economic crisis grew. This resulted in the price of diesel dropping further, with diesel recording its lowest price for the month on 20 August at Rs.70.05 per litre.
- In the last week, the rates rose marginally before closing at Rs.70.19 per litre. The overall performance of diesel in the southern state for the month was -1.08%.
Trend of Diesel Price in Kerala for July 2019 (rates per litre)
|Highest Rate in July||Rs.71.68 on 7 July|
|Lowest Rate in July||Rs.69.14 per litre on 1 July|
Monthly Diesel Price Trend in Kerala for July 2019:
- Diesel opened the month at Rs.69.14 per litre in Kerala – the lowest price recorded during the month – and inclined by the end of the week after the Centre imposed an additional excise duty and cess of Rs.2 per litre during the 2019 Budget which led the highest price of the month when diesel was sold at Rs.71.68 a litre on 7 July.
- During the second week, diesel prices in the state declined marginally to close the week at Rs.71.22 per litre despite an inclining crude oil prices in the market amid rising tensions in the Middle East even after supply cuts led by the OPEC and its allies to keep the oil market stable.
- The third week of July, diesel prices remained unchanged when a litre was sold at Rs.71.22 per litre despite crude oil prices continued to rise after the US Navy shot down an Iranian drone escalating tensions in the Middle East.
- The last week witnessed a decline in diesel prices even as Oil Marketing Companies (OMCs) chose to keep diesel rates subdued although crude oil prices increased after it was reported that the US inventories declined, and after the US said it may have downed a second Iranian drone, escalating tensions in the region.
Trend of Diesel Price in Kerala for June 2019 (rates per litre):
|2nd June||Rs.71.11 per litre|
|30th June||Rs.69.03 per litre|
|Highest Rate in June||Rs.71.11 per litre on 2 June|
|Lowest Rate in June||Rs.68.60 per litre from 20-23 June|
- On 2 June, diesel price in Kerala stood at Rs.71.11 per litre, this was also the highest price recorded during the month amid volatile crude oil prices in the market.
- Prices largely remained on the decline during the first and second month only to increase marginally in the third and fourth week even as crude oil prices stabilised after plummeting more than 10% in the last week of May.
- Between 20 and 23 June, diesel prices in Kerala were at its monthly lowest when a litre of the fuel was sold at Rs.68.60 a litre even as crude prices fell due to limited supplies in the market.
- During the course of the month, diesel prices declined by 2.92% owing to the decrease in crude prices attributed by the supply cuts led by the Organisation of Petroleum Exporting Countries (OMCs) despite geopolitical tensions in the Middle East due to US sanctions on Iran.
Daily Revision of Fuel Prices
All diesel bunks throughout the state have begun revising diesel rates on a daily basis since 16 June 2017. Rates will change at 06:00 a.m. every day. Each diesel bunk will display the updated price at its premises for the public. Earlier, the revision used to happen twice a month, which is on the first and sixtieth of every month by taking the average price of crude oil over the last fifteen days and the exchange rate of the INR to the USD.
The new fuel pricing mechanism also considers the variations in overseas crude oil and the exchange rate fluctuations. Unlike the previous revision methodology, variations in the exchange rate and oil rates will be instantaneously shifted to end users of diesel. The new system also makes fuel pricing more transparent. Diesel outlets can practice the best stock management practices under the new system.
Diesel consumers will not be impacted much by dynamic fuel pricing as the variations in diesel prices are not so high. In the earlier system, prices used to change in big margins. With the daily revision in practice, all state-owned oil marketing firms offer an SMS service, a customer care service and an online service for diesel consumers from Kerala to get the latest diesel prices.
Diesel Prices in Kerala
The average price of diesel for the last five days is Rs.61.998. The rate has fallen by more than two rupees since 3 October 2017. It is because of the reduction in the central excise duty. Before deducting the excise, the diesel rate was Rs.64.3 on 3 October 2017.
|Also Check: Diesel Price in Trivandrum|
How to Compute Diesel Price in Kerala
Like any other cities, the cost structure of diesel in Kerala consist five elements that include the cost of crude oil including freight charges, refinery transfer price, the profit margin of oil marketing companies (OMC), dealer commission, and the state and the central tax on diesel. 50% of retail selling price consist tax elements.
As we all know, India is a huge importer of crude oil. When oil marketing companies import crude oil from overseas oil companies, oil manufacturing companies remit the cost of crude oil in addition to freight charges. Refinery transfer price is the price charged by refineries to transform raw oil into diesel. It will be fixed. The possession of refined oil will be held by oil marketing companies till it is delivered to dealers for sale.
Oil marketing companies then add a certain percentage of profit on the cost of crude oil and the refinery transfer price. Diesel is taxed by the state government and the central government as well. With effect from 4 October 2017, the government of Kerala taxes diesel by 29.21%. The central excise duty imposed by the central government is applicable to all states of India.
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. It was recently revised on 4 October 2017. After reducing the excise duty, the cost of diesel has come down by more than Rs.2 in Kerala.
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.
The exchange rate fluctuates often. It is related to the cost of crude oil. If the base currency falls against the local currency, the cost of raw oil will be cheaper in Indian rupees. If the local currency falls against the base currency, the cost of crude oil will be increased proportionately. As a result, the performance of the exchange rate will direct affect diesel prices in Kerala and other Indian cities.
What is the Impact of GST on Diesel Price in Kerala?
The retail selling price (RSP) of all types of goods and services have slighted changed since the rollout of the Goods and Services Tax (GST) in the month of July 2017. But, diesel rates have remained unchanged in the state. GST is not applicable to five petroleum products including diesel. Many of us know that the highest GST rate fixed by the GST Council till date is 28%.
Even if diesel in Kerala is taxed at 28%, the current rate of diesel will fall by at least 20-30%. The implementation of GST will harm the revenue source of the central and state governments. Goods and Services Tax (GST) is not applicable to the entire oil and natural gas industry. All industrial players will not pay tax under the scheme of GST. If the industry is brought under the regime of GST, the compliance cost will be doubled as all participants have to follow the current tax regime and the GST slab.
Diesel Rates vs. Petrol Rate in Kerala
Diesel is priced less compared to petrol because it is a subsidised commodity. The net difference between the current rate of petrol and diesel in Kerala is reasonable like any other state. The prices of petrol and diesel offered by different oil brands will change a bit. They are expected to go up slightly over the next one or two months.
Also Check Diesel Price in NearBy Cities of Kerala
|Diesel Price in Trivandrum||Diesel Price In Malappuram||Diesel Price In Kozhikode|
|Diesel Price In Thrissur||Diesel Price In Kannur|
*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.