Diesel Price In Patna
There are numerous factors that affect the diesel price in Patna but the key aspect among them is the international crude oil rates. However, this isn’t the only component that is used in determining the retail price of diesel. To help you understand better, here is a detailed article that explains the various factors that affect the diesel rates in Patna and the type of fuel pricing mechanism it employs. But before that here is a quick introduction to Patna’s economic and industrial growth.
Economy Of Patna
Patna is not only the capital but also the biggest city in the state of Bihar. It is about 18 km in width and 35 km in length. With an estimated population of more than 2 million, Patna is reported to be India’s 19th biggest city.
The city is located on the banks of the River Ganges. However, it also connects with the rivers Punpun, Gandak, and Sone.
|Also Know: Petrol Price In Patna|
According to the World Bank, Patna ranks as the second best place to start a business. With an incredible growth, the city is reported to be the 5th fast growing cities in India and 21st in the world. Patna has consistently been one of the major agricultural hubs and trade centers in India. Its active exports include sesame, medium-grained rice, grain, and sugarcane. Apart from these, the city also features various sugar mills and is in fact, a vital business center in Eastern India.
Patna’s economy has shown continuous development since 2005 and is reported to be the best in FMCG (Fast-Moving Consumer Goods) sector.
Factors That Affect Diesel Price In Patna
The retail price of one liter of diesel is reflected by the profit (or loss) and cost of manufacturing as well as delivering it to the consumers. Though there are several factors that affect the fuel rates in Patna, the primary components include:
- Cost of the crude oil bought by the refinery
- Profit margin
- Refining cost
- Marketing cost
- Petrol pump cost
- Distribution cost
- Marketing cost
The retail price for one liter of diesel not only differs from time to time but also varies based on the geographical location of a place.
1. Cost Of Crude Oil
The cost of crude oil is one of the biggest and key components in determining the price of diesel. Crude oil is one of the major raw materials for extracting diesel. Currently, India’s 75% of the crude oil requirements are met by imports. Therefore, foreign exchange rate and international crude oil cost form the key aspects in deciding the retail price of diesel.
On the other hand, global supply and demand also help in determining the price of crude oil. The global economic situations contribute a lot to the overall demand for petroleum products that are made from crude oil. Since diesel is one of the primary fuel used for transportation, its demand usually depends on the economic trends.
2. Oil Production Companies
An oil production company is completely responsible for manufacturing oil in crude form. These companies are usually a blend of both private and public sectors. Private companies include Carin India Limited, Reliance Industries Limited, etc. whereas public sectors include ONGC (Oil and Natural Gas Corporation), Oil India, etc. Together, both sector can only cater about 25% of India’s crude oil requirements and the rest is imported.
3. Oil Marketing Companies
The OMCs (Oil Marketing Companies) then bring the crude oil from oil refineries and handle it right from its crude phase to delivery phase. In short, the Oil Marketing Companies are in charge of refining the crude oil and converting it into diesel. Finally, the refined diesel is sold to the dealers.
Even this sector features both public and private companies. But these three control about 95% of the business:
- IOCL – Indian Oil Corporation Limited
- HPCL – Hindustan Private Corporate Limited
- BPCL – Bharat Petroleum Corporation Limited
The above three are public sector companies whereas Essar & Reliance Industries cater the remaining marketplace.
The tax imposed on diesel differs from one nation to the other. Whenever there is an incline or decline in fuel rates, the tax is a key element for it. Tax policies resolve the cross-country breaks between gasoline and diesel prices largely.
5. Rise In Demand
Generally, whenever the demand for a commodity goes up, the price of it also increases. Talking about an all-time required commodity like fuel, though it is consistently in demand, there are times when it reaches its peak. This usually happens more often in developing countries like India and China.
What Fuel Pricing System does Patna Follow?
Currently, not only Patna but also every region (small and big) in India follows the mechanism of “dynamic fuel pricing system.” It was implemented on June 16, 2017, to overcome the drawbacks of the existing system.
Earlier, the fuel rates were updated on the first and sixteenth day of every month at morning 8:00 a.m. IST (Indian Standard Time) based on the international crude oil rates and other fuel trends of the previous day. This was called “fortnight pricing system.” However, this had a lot of disadvantages. The oil marketing companies not only incurred heavy losses at times but also the government could easily influence the price.
To bring clarity or transparency to the system, the “dynamic” concept was implemented. This mechanism is something that most developed nations follow till date. According to this method, the prices are updated every morning at 6:00 a.m. IST (Indian Standard Time) based on the previous day’s CER (Currency Exchange Rate) and international crude oil price.
Does GST Have Any Influence On Diesel Rates In Patna?
At present, GST does not have any influence on the diesel prices in Patna because it is something that has not yet been implemented. It is a big process and takes a plenty of time and planning by both state and central government.
Also Check Diesel Price in NearBy Cities of Patna
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