Diesel Price in Nagercoil
Nagercoil is an emerging city in the Indian state of Tamil Nadu. Here, we discuss various aspects related to diesel, including GST and dynamic fuel pricing. Let’s first take a look at recent diesel prices in Nagercoil. After the daily price revision on 24 May 2018, Indian Oil unveiled a price range of Rs.73 per litre. The price primarily consists of crude oil expenditures and taxes. Indeed, there will be a minute deviation in the offers made by Bharat Petroleum Corporation Limited and Hindustan Petroleum Private Limited.
Each fuel brand is equally competitive in terms of quality parameters. In Nagercoil, like other Indian cities, the fuel is sold via fuel dealers of HPCL, BPCL and IOCL. The fuel market is minutely shared by other two fuel brands such as Reliance Oil and Shell Oil. All the fuel companies will attract different classes of customers. Pricing strategies will differ. Diesel prices, for example, offered by Shell Oil and Reliance Industries are lesser compared to well-established, state-run companies.
Determining and Revising Diesel Price in Nagercoil
India has introduced dynamic fuel pricing to revise the value of diesel. To value something, marketers use certain strategies. A mobile company will consider the demand pattern in order to determine the price of its newly-launched mobile phone. Diesel is also a commodity, which is now priced under dynamic fuel pricing. The model of dynamic fuel pricing is based on the exchange rate and crude oil expenses. It has also been tested in Japan, Australia, Russia, etc.
Salient Features of Dynamic Fuel Pricing
- It is a daily fuel price revision system. Revised prices are declared every day at all diesel stations in Nagercoil.
- Both mechanized and non-mechanised fuel stations will follow the system, which does not entertain the influence of political factors.
- Fuel pricing is fully transparent.
Merits of Dynamic Fuel Pricing
Dynamic fuel pricing is advantageous to customers and fuel brands. Any fluctuations in the rate of unrefined oil and the currency conversion rate can be immediately transferred to final customers in Nagercoil. The supply of diesel cannot be interrupted. BPCL, HPCL and IOCL can easily manage their stock levels. Working capital and cash can also be easily managed. More importantly, dynamic fuel pricing bridges the gap between the Indian fuel sector and the global fuel sector.
Trace Today’s Diesel Price in Nagercoil Downloading Mobile Applications
Tracing the latest diesel price in Nagercoil is easier now with a few customised mobile applications in place. Consider the following options which are easy to use. Many people have already begun using mobile applications such as SmartDrive, My HPCL and Fuel@IOC. Each application provides attractive features and can be used to trace the current diesel rate in Nagercoil and the transactions you have made at fuel stations.
Computation of Diesel Price in Nagercoil
Step 1: Computation of Crude Oil Cost
OMCs need crude oil to produce diesel. They import crude oil. The price paid to purchase crude oil is called the cost price of crude oil. Crude oil is clubbed into two classes: WTI and Brent. The price of each brand is different. In domestic markets, OMCs compute the aggregated price of Brent crude oil and WTI crude oil. It is used as a standard to reset fuel prices.
Step 2: Computation of OMC Expenses
OMCs are a primary industry participant. They have several types of expenses, which include landing expenses, entry taxes, transportation costs, marketing expenses, refinery transfer price, etc.
Step 3: Imposition of Taxes
In India, diesel is taxed by the state government and the central government. The tax imposed by the central government is called excise duty whereas the tax collected by the local government is called Value-added Tax.
Step 4: Commission Paid to Dealers
Dealers will function as an intermediary between fuel companies and customers. They will be paid a fixed rate of commission. The commission charged to dealers may not be the same across the country.
RSP of fuel = crude oil cost + excise duty + VAT + commission
Factors Affecting Diesel Rate in Nagercoil
Fuel rates are affected by the exchange rate, crude oil overheads, excise duty and state-level taxes. The exchange rate measures the value of a currency against another currency. Similarly, the USD/INR exchange rate gives us the conversion rate of the USD versus the INR. On a daily basis, this exchange ratio is revised by the Central Bank of India. The price of crude oil will increase if the INR appreciates. When the INR depreciates, the crude oil rate will fall. Based on the changes in crude oil rates, fuel price gets adjusted.
Excise duty has to be adjusted whenever required. When excise duty comes down, fuel rates will decrease and vice versa. Value-added Tax (VAT) can also be revised by the concerned government. If it falls down, fuel rates will diminish and vice versa. Excise duty on diesel was Rs.3.46 per litre in November 2014. It further increased to Rs.17.33 per litre in August 2017. Further, it was reviewed to Rs.15.33 per litre in May 2018.
Impact of GST on Diesel Price in Nagercoil
GST is a major change in the Indian tax system. It is defined as a unified tax process imposed in July 2017. At 5%, 12%, 18% and 28%, GST is charged on a number of goods and services. After the implementation of GST, petroleum derivatives were excluded from GST. Let’s understand the impact of imposing GST on diesel by taking the example of the national capital. On diesel, if GST is executed at 12%, the price of diesel in Delhi will fall down to Rs.31 per litre. At 18% GST tax bracket, diesel will be priced at Rs.33 per litre. If GST levied at the highest rate of 28%, the price of diesel will be Rs.33 per litre. Bringing diesel under GST will reduce diesel prices in Nagercoil as well. Moreover, industry participants are required to pay more compliance overheads. Many people across the country have demanded the Central Government to impose GST on petrol and diesel. However, it has to be decided by the concerned authorities.
*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.