Diesel Price In Kolkata Today

Diesel Price in Kolkata

Kolkata, the capital city of West Bengal is a bustling city in East India. It is the second largest city in India after the country’s financial capital, Mumbai. Being the prime business, commercial and financial centre of eastern India, the city attracts people from across the country.

It creates a huge number of employment opportunities and supports migrants from neighbouring states. Manufacturing sector is the mainstay of the city’s economy, while the service sector is slowly picking up pace to become one of major contributors to its economy.

Kolkata is home for many industrial units and is slowly becoming a hub of information technology (IT) with more and more companies planning to set up their offices in the city.

The public transport in Kolkata is mainly composed of government run and privately run buses, metered-cabs, trams and auto rickshaws.

The air pollution in the city has reached to alarming rates with more than 95% of the commercial vehicles run on diesel.

Despite the ban of commercial vehicles older than 15 years and an order to convert all autos to LPG, diesel consumption in the city remain high with the number of diesel vehicles rising exponentially every year. The city’s vehicular count has risen 200% in the last decade, with more than 50% registered vehicles running on diesel.

In a such a scenario, let us see whether or not the increase in diesel consumption in the city leads to increased demand and high diesel prices in the city.

Also Check: Diesel Price in West Bengal

Factors Affecting Diesel Rate in Kolkata

Diesel price Kolkata as in rest of the Indian cities is composed of various cost elements that will be added at different stages as diesel travels from international refineries to the city petrol pumps.

The base price of diesel is the price at which it is bought from the international companies in crude form. The purchased crude is refined and transported to India. The base price will be added with freight charges and refining charges at this stage.

The Indian oil companies then add their profit margins and sell them to the dealers, which are typically petrol pump owners, across states/cities.

Dealers add the state and central taxes along with their commission to the purchased price of diesel and sell it to the customers.

As various costs are involved in diesel pricing, any variation in any of the components would affect the retail selling price of diesel.

Also Know: Petrol Price In Kolkata

For instance, the fluctuating nature of the international crude oil price is the major component that impacts the diesel price on a daily basis. The US dollar to rupee exchange rate is another factor which changes every day hence would affect the price of diesel in India. The effect of exchange rate on diesel price is because of oil trading which typically happens in dollars.

Besides the daily fluctuating elements, there are these state and central taxes on diesel. Any change in the taxes would directly impact the diesel price as taxes constitute 50% of diesel price in India. Whenever there is a revision in the tax rates, the selling price of diesel would change accordingly.

The recent excise duty cut by central government is one such move which reduced the diesel prices in Kolkata, and in rest of India, by Rs. 2/Lt, beginning 4 October 2017.

Diesel Price in Kolkata Compared to Other Metro Cities

Compared to other metros in India like Delhi, Mumbai, Kolkata, Chennai and Bengaluru, diesel price in Kolkata is the fourth highest with Hyderabad having the highest diesel price.

The difference in diesel price from each metro is mainly due to the variance in the state-levied taxes on diesel. While the excise duty charged by the central government remains same across the states, it is the value added tax (VAT) that differs from one state to another.

The difference in VAT along with slight difference in other components such as dealers commission, oil company margins, transportation charges is what makes diesel price different across cities.

Diesel Price Trend in Kolkata between July and September 2018

Diesel Price Trend in Kolkata in July 2018

• India has implemented dynamic fuel pricing in June last year to align fuel consumers with real-time market conditions.
• As India buys petroleum from overseas markets, the crude oil rate and the performance of the INR/USD currency have to be pondered while resetting the rate of diesel every day.
• The opening date price is the price offered on the first day of July. It stood at Rs.69.93 at Indian Oil fuel centers in Kolkata, the capital city of West Bengal.
• Every day, the new price was announced by the state-run oil companies and private sector oil companies as well.
• Diesel prices were increased in the first two weeks and also were decreased in the last two weeks by OMCs.
• The commodity was revalued at Rs.71.06 per litre on 16 July 2018 in Kolkata. This was the highest fuel rate in the month.
• In July, fuel prices soared by just 0.97% as the exchange rate of the dollar accelerated against the rupee.
• The VAT is the reason behind the fuel price fluctuation in the Indian cities. It had no influence on fuel pricing this month.
• The excise duty, which is a common tax across the country, remained unrevised at Rs.15.33 per litre in July.

Diesel Price Trend in Kolkata in August 2018

• Diesel was revalued at Rs.70.73 per litre under dynamic fuel pricing on 1 August 2018 in Kolkata. The OMCs used the same mechanism in the entire month of August 2018.
• Because of a sturdy increase, the fuel price jumped to Rs.71.35 per litre on the last day of the first week.
• Irrespective of the changes in the global factors, diesel rates in Kolkata were constant at Rs.71.35 per litre for a period of 8-9 days.
• Fuel price on 16 August 2018 increased by 30 paise per litre. This was a massive hike provoked by a gain in the dollar’s exchange rate.
• In the last 15 days also, the prices of diesel in Kolkata neither increased nor decreased for some days.
• On 28, 29, 30 and 31 August 2018, fuel prices in the capital city of West Bengal accelerated by 15 paise a litre, 14 paise per litre, 18 paise per litre, and 28 paise per litre respectively.
• The difference between the closing date and opening date prices is Rs.1.37.
• Crude oil prices increased in August because of the production cut and other global factors. The INR’s exchange rate declined caused by marginally increased petroleum rates in August 2018.

Diesel Rate Trend in September 2018 in Kolkata

• In the initial days of the month, market analysts expected a further increase in diesel rates in Kolkata in September 2018.
• The Chief Minister of West Bengal reduced the sales tax in order to control the upward trend in fuel rates. Karnataka, Andhra Pradesh, and Rajasthan also declined the sales tax on diesel in the interest of fuel customers.
• The rate at which the USD gained against the INR was higher in September 2018 compared to the previous two months. The same goes with the prices of unrefined oil prices.
• Therefore, diesel price at the fuel stations of Indian Oil, BPCL and Hindustan Petroleum were augmented by 4.59% in September 2018.
• For the whole quarter, the highest and lowest fuel rates were booked at Rs.76.64 a litre and Rs.69.93 a litre.
• OMCs decrease fuel rates when the USD drops and the crude oil cost decreases. They increase petrol and diesel prices when the USD gains and the cost of unrefined oil increases.
• The same formula was used by the OMCs to restructure the price of diesel in July, August and September.

Note: Primarily, the pricing of crude oil is impacted by production cuts, changes in demand for the commodity, geopolitical tensions, etc. The exchange rate is determined considering factors such as the interest rates, fiscal deficit, imports, exports and so on.

Quarterly Diesel Price Trend in Kolkata between April 2018 and June 2018

Diesel Price Trend in Kolkata in April

• Under dynamic fuel pricing, diesel was offered at Rs.67.55 a litre on 3rd and 4th. Similarly, the fuel was sold at Rs.67.69 a litre on 10th and 13th. On 14th, diesel rate in Kolkata, the capital city of West Bengal, soared to Rs.67.7 a litre.
• Diesel rates in the city of Kolkata showed a mixed reaction during the third week of the month. Diesel was sold at Rs.68.63 a litre on 25th, 26th, 27th, 28th, 29th and 30th.
• The opening date price was recorded at Rs.67.27 a litre, which was also the lowest diesel rate for the month.
• Because of an upward trend this month, the highest fuel rate was recorded at Rs.68.66 a litre towards the end of the month.
• Taking into account the variations in the rate of crude oil and the exchange rate, diesel rates in the city of Kolkata have increased by 2.02% in the month of April.
• The cost of crude oil was increased in international markets considering the increased demand for unrefined oil.

Diesel Price Trend in Kolkata in May

• Like other metro cities, the price of diesel per litre was sold at Rs.68.63 a litre for the first 11 days of May caused by the stable crude oil market.
• On the other hand, state-run fuel companies such as Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited have increased the rate of diesel during the last 20 days of the month.
• In this month, the crude oil rate per barrel has increased by $6. As a result, fuel rates were increased by 4.66%. The closing date price for the month stood at Rs.71.83 a litre. It was also the highest fuel rate for the month.
• In May, the growth rate was higher compared to the previous month. Other metro cities such as Delhi, Chennai and Mumbai have also reported the same result.
• Taxes are also a part of the retail selling price of diesel. The revision of taxes will have a direct impact on the pricing of diesel. In June also, excise duty was not changed by the Central Government.

Diesel Price Trend in Kolkata in June

• On 1st, diesel rate in Kolkata stood at Rs.71.78 a litre. The price was further increased to Rs.71.66 a litre on 2nd and 3rd.
• For the first seven days of the month, the average rate of diesel per litre was Rs.71.54. The average diesel rate per litre in Kolkata has decreased over the last three weeks.
• Unlike the first two months, in June, the fuel rate has fallen by 2.57% because of a downfall in the price of crude oil per barrel.
• The USD/INR exchange rate was considered to be relatively flexible. It had no impact on the revision of fuel rates in the city of Kolkata throughout the quarter.
• On 1 April 2018, diesel price in Kolkata was Rs.67.27 a litre. By the end of June 2018, the fuel price was increased to Rs.69.93 a litre. It means the fuel rate has increased by 3.95% between April 2018 and June 2018.
• For the whole quarter, the highest fuel rate was declared at Rs.71.78 a litre whereas the lowest fuel price stood at Rs.67.27 a litre.

Trend in Diesel Price in Kolkata between January and March 2018

Trend in Diesel Price in Kolkata in January 2018

• It has been a great month that produced an uninterrupted upsurge as far as the diesel price in Kolkata is concerned. The fuel price was steady not even for a single day.
• The fuel market opened with a price of Rs.62.42 a litre and was expected to travel upwards in sync with the growing crude oil costs and the falling value of the greenback against the local currency.
• As anticipated, the fuel reached the price range of Rs.62.97 a litre on 7 at an increasing rate of 0.88%, Rs.64.54 a litre on 16 at a growth rate of 2.49%, Rs.66.05 a litre on 26 at an increasing rate 2.32%, and Rs.66.67 a litre on 31 at a growth rate of 0.95%.
• This growing trend was triggered by an increase in the Indian Basket average rate of unrefined oil, which was $67.50 per barrel on 10, $66.69 per barrel on 19, and $68.11 per barrel on 26.
• Like Delhi, Chennai and Mumbai, the diesel price also in Kolkata breached its multi-year highs this month since the unrefined oil’s demand increased substantially.
• Kolkata reported a 6.80% gain in the Retail Selling Price of diesel, which majorly includes the taxes, the commission for fuel suppliers, the total amount of expenses spent by Indian OMCs, etc.

Trend in Diesel Rate in Kolkata in February 2018

• The fuel was purchased at Rs.66.76 a litre on 1 and 2, Rs.66.74 per litre on 3 and 4, and Rs.66.79 a litre on 5. On 6 and 7, the fuel was valued the highest at Indian Oil at Rs.66.87 per litre.
• It clearly symbolises an increasing trend not because of the announcement of the Union Budget for the FY 2018-2019 on 1 but because of the sustained demand for crude oil from emerging nations including India.
• After the first week, the crude oil market was sluggish and the commodity started gradually losing its price in overseas markets. The exchange rate also showed a mixed reaction.
• During the second, third and fourth weeks, the rates of Brent Crude Oil and WTI Crude Oil have fallen reasonably, which in turn reduced the crude oil price (Indian Basket) to $63.54 per barrel this month.
• Eventually, the diesel price depreciated 2.90% to Rs.64.82 a litre (closing price), the third highest price for the month.
• Other Indian metro cities also reported a declining trend but the margin of fall minutely varies from city to city. It was 3.05% and 2.32% in Delhi and Chennai respectively. Conversely, in Kolkata, it was 2.90%.

Trend in Diesel Prices in Kolkata in March 2018

• Due to uninterrupted refinery activities in OPEC nations and the constant demand for the commodity, both WTI and Brent Crude have gained the price at the beginning of the month.
• HPCL, Indian Oil and BPCL, the Indian Oil Marketing Companies (OMCs), never reduced the fuel rate. For a few days, the offer was stable.
• To make it clear, an offer of Rs.65.7 per litre was extended on 6 and 7 and Rs.65.59 a litre on 13 and 14 correspondingly. For the remaining days, the price was hiked by the OMCs under the dynamic fuel pricing methodology.
• In this quarter, no production cuts and bad weather conditions were reported by OPEC countries. No changes were made with regard to the domestic taxes in Hyderabad as well.
• A prime reason behind a 3.23% shortfall in the price is a 0.40% upsurge in the cost of crude oil this month.
• The highest price for the quarter was divulged at Rs.67.09 a litre on 31 whereas the lowest rate stood at Rs.62.42 a litre on 1 January.

State Taxes and Diesel Price in Kolkata

The West Bengal government levies value added tax (VAT) on every litre of diesel sold in the state, hence the same is applicable for the city of Kolkata.

As of 5 October 2017, the state government charges 18.46% VAT on a litre of diesel. Compared to the VAT charged by other states where metro cities are located, West Bengal government charges the second lowest, with the lowest being charged in Delhi.

How Often Diesel Prices are Revised in Kolkata?

With the daily fuel price revision in place, diesel price in Kolkata, along with other Indian cities, is being revised on a daily basis from June 2017.

Also known as dynamic fuel pricing, the new pricing structure revises the diesel price every day based on the international crude oil price and the dollar/rupee exchange rate.

Prior to dynamic pricing, diesel prices in Kolkata were revised once in every 15 days, by considering the average of the global crude prices of the previous 15 days.

According to the new daily price revision, diesel prices in Kolkata will be updated every day by 6 a.m. at all the petrol pumps in and around the city. The fuel station dealers would get the revised price everyday at 8 p.m. and the same would be updated the next day.

In automated fuel stations, the prices will be updated automatically as they are connected to the central servers of the oil companies, whereas the non-automated pumps should do it manually.

Customers can get the details of daily revised diesel price from oil company websites or mobile apps. If they want petrol pump specific prices, they can send an SMS is a specific format with the dealer code. All the petrol pumps will display their dealer codes prominently to enable customers to avail the SMS service.

The new pricing model will pass even the smallest change in the crude price and dollar/rupee exchange rate to reach the end customers immediately.

Effect of GST on Diesel Price in Kolkata

Diesel and other petroleum products are currently kept outside the purview of GST or the goods and services tax. Hence, the effect of GST on diesel price is Kolkata is nil.

The commodity is still being taxed as per the old tax regime, where state and central government taxes are levied separately.

If diesel is brought under GST, its price in Kolkata may go up or come down based on the category in which it is taxed. Currently GST is being charged in four different tax brackets. Only when the percentage of GST on diesel is less than that of the current taxes, the price of diesel comes down in Kolkata, else it may go up if it is more than the existing tax.

Diesel versus Petrol Rate in Kolkata

The difference between the diesel cost and petrol cost in Kolkata is majorly due to the difference in taxes being levied on the two commodities.

While the VAT on diesel in Kolkata is 18.46% on a litre of diesel it is 26.85% on a litre of petrol. Also the excise duty levied on both the commodities differs by Rs. 4.15/Lt. Other factors that vary are the dealer’s commission and sometimes the crude oil price. The difference in the charges is what makes petrol costlier than diesel.

Also Check Diesel Price in NearBy Cities of Kolkata

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