Diesel Prices in Lucknow
Lucknow is the capital city of Uttar Pradesh. It is the biggest city in the state by population and industrial production. Like other cities, the consumption of diesel in the city is increasing. Have you observed the latest trend in diesel prices in Lucknow? Have they increased or diminished? Let’s consider the last four months of the current fiscal year (2017-2018) to make a comparative study.
In March, diesel rates were steady throughout the month. They were up by 2.47%, 3.26% and 2.41% in September, August and July. The highest price was Rs.59.95 in September. In August, it was Rs.58.36. In July, it was Rs.56.39. On the other hand, in September, the lowest rate was Rs.58.43. In August, it was Rs.56.46. In July, it was Rs.55.03. In October, diesel rates in Lucknow have fallen over Rs.2 per litre because of the reduction in the excise duty by the central government.
|Also Know: Diesel Price in Odisha|
How are Diesel Prices Revised in Lucknow?
In Lucknow, the daily revision system is currently being practiced by all state-run oil marketing companies such as Indian Oil, Shell Oil, Hindustan Petroleum and Bharat Petroleum, who have left the 15-year old practice of revising fuel prices twice a month. The daily revision is also called dynamic fuel pricing. The new practice is in use since 16 June 2017.
As per the new system, all diesel bunks whether automated or non-automated will revise the rate of diesel at 06:00 a.m. every day. Dynamic fuel pricing will make sure that the advantage of even the lowest change in overseas crude oil rates can be immediately transmitted to end consumers and dealers. Furthermore, the initiative is said to eliminate big jumps in prices.
What is the average Price of Diesel in Lucknow Compared to other Cities?
The average price of diesel in Lucknow as on the latest date was Rs.58.28. In New Delhi, it was Rs.56.96. The difference between the two cities was Rs.1.32. The average price of diesel in Mumbai was Rs.59.70 and in Kolkata, it was Rs.59.62. The difference between these two cities was Rs.0.08
How are Diesel Prices in Lucknow Assessed?
The components of the price structure of diesel in Lucknow can be grouped into three categories, which include 1) the cost of production and supplying diesel to end users, 2) the operating expenses of retail outlets and 3) state and central levies. The cost of production includes distribution, refining, processing and procurement expenses such as cost of crude oil, refinery transfer price, distribution and marketing expenses.
Retail outlets of diesel can be operated and owned by refinery themselves or by independent entities that buy diesel from distributors or refineries. Operating expenses of retail outlets rely on several considerations such as local market conditions, the location of retail outlets and the marketing strategy of retail station owners.
Diesel is taxed by both the central and state governments. Over the last three years, the central excise duty on diesel increased by more than 4 times to Rs.17.33 per litre from Rs.3.56 per litre. The state VAT levied on diesel will differ from one state to another. There is no fixed VAT on diesel in Uttar Pradesh since the state government delinked diesel rate variations to protect its revenue share at a constant rate.
In a nutshell, the retail price of diesel in the city of Lucknow replicates the expenses incurred by each division of supply chain comprising distributors, diesel bunk owners, marketers and refiners. The relative portion of the various elements in the retail pump price of diesel fluctuates with time and also fluctuates across different localities.
What are the Influencers of Diesel Prices in Lucknow?
Diesel prices in Lucknow are impacted by the following factors:
- Supply and demand of crude oil
The global demand and supply of crude oil influence the cost of crude oil, which is one of the most important elements in the final price of diesel. Due to interruptions in crude oil supply, the last few years witnessed an unparalleled hike in crude oil prices globally.
- Disparities in demand and supply
Diesel is basically a transportation fuel. Glitches at refineries or insufficient and delayed imports lead to unanticipated interruptions in the supply of diesel. The gap between the demand and supply of the fuel leads to variations in retail selling prices.
- Seasonal variations
Diesel prices will fall a bit during the summer, increase during the fall and surge during early spring. As the consumption of gasoline increases during the summer, the demand for diesel dips. The lower the demand for diesel, the lower will be the price.
- Geographical variations
Diesel outlets that are farthest from distribution and refinery terminals have more diesel prices to account for the expenses incurred in shipping the fuel. Local market situations such as traffic patterns, the number of retail diesel bunks or outlets and state fees affect the retail selling of diesel.
- VAT and the Central Excise Duty
The state VAT on diesel is fixed by state governments whereas the central excise duty is fixed by the central government. Any variations in these two tax components will equally impact the retail selling price of diesel.
- Exchange Rate
The central bank of India determines the value of the USD against the local currency. The exchange rate is impacted by many factors such as interest rates, inflation rates, import and export patterns and the overall public debt of India and the US. The cost of crude oil will vary based on the exchange rate.
GST and Diesel Prices in Lucknow
The Goods and Services Tax (GST) is a value-added tax imposed on all types of goods and services sold for indigenous consumption. GST is paid by end consumers, but it is paid by merchandisers to the government. In effect, GST is a major source of revenue for the government. GST has no impact on diesel prices in Lucknow since diesel has not been brought under the regime of GST. If GST is imposed on diesel, the current diesel price in Lucknow slashes by 20-30%.
|Also Check: Diesel Price in Uttar Pradesh|
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