Diesel Price in Nellore
Today, the diesel price in Nellore stands at Rs.70.03 a litre. The fuel traded at an average price of Rs.70.30 a litre in March 2018. It is inclusive of the central government’s tax. In Andhra Pradesh, the state-level Value-added Tax is levied at 30.86%. It works out to be Rs.16.08 a litre. The excise duty is levied at Rs.15.33 a litre. Both petrol and diesel rates in Nellore have increased dramatically over the past one year due to the rate of unrefined oil, which has gone up to $65 from $63. The commission charged by dealers on diesel per litre recently increased to Rs.2.51 a litre. Between June 2017 and March 2018, the diesel price in Nellore has gone up by Rs.2-3 a litre.
Introduction to Dynamic Fuel Pricing
Dynamic fuel pricing is defined as a fuel revision practice that will take into consideration the closing price of the dollar’s value against the indigenous currency and the cost of crude oil. It was launched in India in 2017. Since the last 9 months, fuel retailers, including Hindustan Petroleum Corp, Bharat Petroleum Corp and Indian Oil Corp in Nellore are updating the fuel rates each day. More than 96% of diesel centers in the city are owned by these companies. Before June last year, the oil companies were using the fortnightly average.
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Diesel consumers from the city of Nellore are expected to check fuel rates while buying since they are changing each day. The practice suggests that price of a commodity will be kept lithesome. The price of a commodity fluctuates on the basis of the locality of outlets. The current diesel rate in Nellore remains unchanged at all diesel stations in the city. The daily revision methodology eliminates the biggest change in prices, which should be effected at the fortnight’s end. It connects diesel buyers to overseas marketplaces.
Today, dynamic fuel pricing is a transnational practice. Both fuel consumers and oil marketing corporations shall benefit from the move. It leaves positive notes to OMCS that could easily probe earnings and expenses. Therefore, the speculations in quarterly or monthly reports may be eliminated. Normally, OMCs will manage a vast hedge fund in order to engross the variations in crude oil rates. They can improve their net revenues by 5-7% since the expenditures of a hedge fund shall slide.
Mobile Applications to Trace Today’s Diesel Price in Nellore
- Fuel@IOC: It is the name of the recently launched mobile application by Indian Oil Company, which is one of the biggest oil selling companies in the country. The mobile application is widely in use. Android and Apple users can download this application.
- SmartDrive: SmartDrive has been launched by Bharat Petroleum Corporation Limited to help fuel users obtain daily fuel prices in Nellore. If you would like to trace the previous transactions, consider downloading this application.
- My HPCL: If you are a user of IOS and Windows, consider downloading this app, which has been designed by Hindustan Petroleum. It is useful for multiple purposes.
Diesel Price in Nellore, how is that assessed?
- Let ’s presume that Hindustan Petroleum Company imports diesel from an oil corporation in Saudi Arabia. This price that is incurred by Hindustan Petroleum will be referred to as Free Onboard Price. It is abbreviated as FOB.
- Now, the commodity is transported to India. The price that is paid to transport diesel from an exporting company to India is called Ocean Freight. We will arrive at freight and cost price by adding FOB to Ocean Freight.
- When the imported diesel is received at Indian ports, import duties are levied. Import duties has three aspects: insurance expenses, ocean losses and port duties.
- Further, the taxes are added. The Central Government levies the excise duty whereas the State Government of Andhra Pradesh levies the local tax at 30.86%.
- Finally, each cost element is added to arrive at the diesel price in Nellore.
Elements affecting Diesel Price in Nellore
The following elements affect the diesel rate in Nellore:
- Crude Oil Cost: The market price of crude oil in international markets greatly impacts the fuel rate in the city. It depends on many factors such as production cuts, the variations in the demand for unrefined oil, the global politics, etc.
- Demand: If crude oil gains demand internationally, the fuel price in Nellore will increase and vice versa.
- Tax burden: The local and central taxes have a major role to play. The prices of fuels must be adjusted in accordance the taxes, which will be imposed by the local government and the central government.
- The disparity in supply and demand: As a general rule, you can expect a price hike when the demand for diesel gains in overseas markets. On the other hand, a price drop may be expected when the demand for diesel falls in international markets.
GST’s effect on Diesel Prices in Nellore
What is GST? Basically, the Goods and Services Tax (GST) is defined as a Value-added Tax levied on services and commodities, which are meant for indigenous usage. Buyers will pay the GST. Finally, the GST is paid to the government by merchandisers. In other words, the GST is referred to as a multi-phase levy, which shall be accumulated at each stage of the distribution and fabrication process.
The GST is not applicable to diesel and petrol till date. In India, the GST is charged at the minimum rate of 5% and the maximum rate of 28%. It is a common platform for merchandisers and customers. The launch of the GST practice has made the taxation process simpler. The current diesel rate in Nellore shall fall by at least Rs.10-15 a litre if the GST Council intends to bring diesel under the present tax mechanism. Dharmendra Pradhan, Oil Minister, recently tweeted “I have urged the Central Government and the Council Members to include both diesel and petrol under the ambit of GST.” In fact, the public at large is interested. The Council Members have to respond. If they accept the proposal, the necessary changes have to be made in the existing tax norms.
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