Diesel Price in Punjab
Punjab is the north western state in India. The city of Chandigarh is the joint capital of Punjab and Haryana.
The major cities in the state include Jalandhar, Ludhiana, Patiala, and Amritsar, which are also popular tourist destinations in India.
With the increasing number of vehicles getting added to the major city roads, the consumption of diesel is increasing in the state. Even the public transport in most of the cities is run by diesel-run buses, which increases the state’s dependency on fossil fuel.
|Also Check: Diesel Price in Chandigarh|
Further, being an agricultural and industrial based economy, diesel is also used to power various equipment and machinery.
Let us if the increasing demand affects the diesel price in the state and taxes being levied on it by the state government.
Diesel Price in Punjab Compared to its Neighbouring States
Compared to the neighbouring states of Himachal Pradesh, Jammu and Kashmir, Haryana and Rajasthan, diesel price in Punjab is relatively low. Except for Rajasthan, diesel price in all other states is almost similar as the state-level taxes levied by the respective governments vary marginally.
Highest diesel price is observed in Rajasthan at Rs.61 per litre, while Punjab sells the same for Rs.57.11/Lt.
Factors Affecting Diesel Rate in Punjab
Diesel price in Punjab is different from that of other states mainly due to the state-specific tax involved. All the states in India levy value added tax (VAT) on diesel and other petroleum products. Whenever there is a revision in the tax, the diesel price in the respective states will get affected and so in Punjab.
Besides VAT, other factors that commonly affect the price of diesel in Punjab and in all other Indian states are the global crude oil price, US dollar to Indian rupee exchange rate, central government taxes, profit margins and other operating costs.
Diesel price in India is directly linked to the international crude oil price as India imports more than 70% of its oil requirements from other countries.
Change in the exchange rate impacts the diesel price as global oil trading typically happens in US dollars. A weak dollar brings the price of diesel down, whereas a weak rupee makes it costlier.
Just like the state governments levy VAT, the central government charges excise duty on diesel, which remains same across states. Any revision is the tax would directly impact the price of diesel across all Indian states. Recently, the government reduced the excise duty on diesel by Rs.2/Lt bringing down the diesel prices across the nation by Rs.2/Lt.
Other factors that would marginally impact the diesel price are the dealer’s commission and other operating costs. Dealer’s commission is currently being revised once in a year by the oil marketing companies. Whenever it is revised diesel prices will get affected.
Quarterly Diesel Price Trend in Punjab between July and September 2018
|Opening date price||Rs.65.43 a litre||Rs.65.92 a litre||Rs.68.47 a litre|
|Closing date price||Rs.65.96 a litre||Rs.68.31 a litre||Rs.72.72 a litre|
|Highest price||Rs.66.63 a litre recorded on the 14th||Rs.68.31 a litre recorded on the 31st||Rs.72.72 a litre recorded on the 30th|
|Lowest Price||Rs.65.43 a litre recorded on the 1st||Rs.65.92 a litre recorded on the 1st||Rs.68.47 a litre recorded on the 1st|
Diesel Price Trend in Punjab in July 2018
- Fuel prices including petrol and diesel are revised every day by State-run Oil Marketing Companies (OMCs) based on the dynamic fuel pricing mechanism.
- Oil companies consider the global crude oil price and the exchange rate of rupee over the U.S. dollar to compute the selling price of diesel in Punjab and other states in India.
- Based on the daily revision, the diesel price in Chandigarh, the capital of Punjab, on the 1st of July 2018 stood at Rs.65.43 per litre - the lowest diesel price for the month.
- Prices were kept unchanged until the 5th before oil companies hiked the diesel price in the city by 12 paise per litre to stand at Rs.65.55.
- Diesel prices continued to incline in the first and second week as prices soared to its highest on the 14th when a litre of diesel in Punjab stood at Rs.66.63.
- While prices declined in the next two weeks, it was higher than the opening price of the month.
- On the 31st, the diesel price in Punjab stood at Rs.65.96 per litre which was slightly higher than the opening price of the month.
- Overall, the diesel price trend in Punjab during the month reflected a growth of 0.81%. This attributed to the slight increase in oil prices in the global market.
Diesel Price Trend in Punjab in August 2018
- In accordance with the daily revision, oil companies decreased the diesel price in Punjab on the 1st by 4 paise per litre to stand at Rs.65.92, this was also the lowest price recorded during the month.
- Due to geopolitical tensions between the U.S and China of a possible trade war, the global crude oil prices moved upwards prompting diesel prices to increase accordingly.
- During the course of the first and second weeks, diesel prices in Punjab and other states continued to increase influenced by the rise in crude oil prices.
- Due to a shortage in supply of crude oil in the international market, oil prices inclined to prompt oil companies to hike fuel prices accordingly.
- On the last day of the month, diesel prices in Punjab rose to touch its highest price of Rs.68.31 per litre for the month.
- The diesel price trend in Punjab during the month of August grew significantly by 3.16%. This attributed to the incline in oil prices in the global market.
Diesel Price Trend in Punjab in September 2018
- On the 1st of September, the diesel price in Punjab stood at Rs.68.47 per litre, a hike of 16 paise over the previous day. This was also the lowest diesel price in Punjab for the month.
- While the global crude oil prices continued to move upwards, the exchange rate of rupee over the U.S. dollar dropped significantly as well.
- A barrel of crude oil in the global market rose to touch a four-year high of $80 coupled with the sharp drop in the rupee, which breached a record Rs.72, influencing the diesel price rise in the country.
- The incline in crude oil prices was attributed to the shortage in supply of Iranian oil and the increase was witnessed across the globe.
- By the end of the month, diesel prices started touching record levels breaking its previous highs. On the 30th of the month, a litre of diesel in Punjab was sold at Rs.72.72 - the highest price for the month in Punjab.
- Except for some states such as Rajasthan, Karnataka, West Bengal and Andhra Pradesh, which announced a cut in taxes levied on the sale diesel, other states did not announce any reduction.
- The diesel price trend in Punjab in September grew sharply by 6.21% influenced by the increase in crude oil prices and the steep fall in exchange rate of rupee over the U.S. dollar.
Quarterly Diesel Price Trend in Punjab Between April and June 2018
|Opening date price||Rs.62.69 a litre||Rs.64.01 a litre||Rs.67.24 a litre|
|Closing date price||Rs.64.01 a litre||Rs.67.28 a litre||Rs.65.43 a litre|
|Highest price||Rs.64.04 a litre registered on 24th||Rs.67.34 a litre registered on 29th||Rs.67.24 a litre registered on 1st|
|Lowest price||Rs.62.69 a litre registered on 1st||Rs.64.01 a litre registered on 1st, 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th and 11th||Rs.65.43 a litre registered on 27th, 28th, 29th and 30th|
Diesel Price Trend in Punjab in April 2018
- The diesel price in Chandigarh, the capital of Punjab, on 1 April 2018 stood at Rs.62.69 per litre - the lowest diesel price in Punjab in the month.
- Over the next seven days, diesel prices inclined due to the rise in the global crude oil price. State-owned oil companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum fix diesel prices on the basis of the international crude oil price and the currency exchange rate of the US dollar over rupee.
- During the second and the third week, diesel prices in Punjab continue to increase, although it was a marginal rise in the fuel prices.
- By the end of the month, diesel prices had increased by Rs.1.32 per litre which is attributed to the rise in oil prices.
- Overall, the diesel price trend in Punjab in April 2018 reflected a 2.11% increase largely impacted by higher crude oil rate and the exchange rate of the US dollar.
Diesel Price Trend in Punjab in May 2018
- Diesel prices during the first week remained steady at Rs.64.01 per litre even as the global crude oil rate continued to be stable in the first week.
- The cost of diesel continued to increase sharply over the second and the third week as the crude oil rate touched $80 per barrel, an increase of nearly $20 compared to the beginning of 2018.
- With the crude oil price touching peak levels, diesel prices in Punjab touched an all-time high on 29th at Rs.67.34 per litre. This was also witnessed across other states as well.
- On the last day of the month, the diesel price had risen by Rs.3.27 per litre compared to the 1st of the month.
- The rise in crude oil rates is attributed to the geopolitical fears which caused concerns that oil-producing countries would limit supply.
- The diesel price trend in Punjab in May 2018 reflected a steep incline of 5.11%, the highest increase during the quarter. The main factors which influenced the increase in diesel prices are the steep rise in crude oil rates and the currency exchange rate of the US dollar over rupee.
Diesel Price Trend in Punjab in June 2018
- With the diesel prices touching new highs, it fell marginally on the 1st of June 2018 when fuel companies supplied diesel at Rs.67.24 per litre in Punjab.
- By mid-June 2018, diesel prices had fallen by Rs.1.35 per litre as the crude oil rate had decreased marginally.
- With the crude oil rate soaring to new highs, the Organisation of Petroleum Exporting Countries (OPEC) and Russia met on the 22nd and agreed to increase the output to ease the rising diesel prices across the globe.
- Diesel prices in June 2018 continued to decline and recorded its lowest price of Rs.65.43 per litre, which remained steady from 27th to the 30th of the month.
- With OPEC agreeing to increase production and amid geopolitical fears easing, the crude oil rate fell significantly.
- Overall, the diesel price trend in Punjab in June 2018 moved downward by 2.70% largely due to a considerable fall in the global crude rate.
Quarterly Diesel Price Trend In Punjab Between January And March 2018
|Opening date price||Rs.58.02 per litre||Rs.62.22 per litre||Rs.60.47 per litre|
|Closing date price||Rs.62.13 per litre||Rs.60.31 per litre||Rs.62.52 per litre|
|Highest price||Rs.62.13 per litre recorded on 31||Rs.62.32 per litre recorded on 6 & 7||Rs.62.52 per litre recorded on 31|
|Lowest price||Rs.58.01 per litre recorded on 2||Rs.60.30 per litre recorded on 25||Rs.60.47 per litre recorded on 1|
Diesel Price Trend In Punjab In January 2018
- The price of diesel in Punjab on the 1st of January 2018 stood at Rs.58.02 per litre, a slight increase compared to the previous day’s price. The lowest diesel price in Punjab was recorded at Rs.58.01 per litre on the 2nd of January.
- During the first week, the prices of diesel climbed steadily and increased by nearly a Rupee.
- On the second and the third week, the cost of diesel started to increase by nearly Rs.3 due to an increase in the global crude oil prices.
- With the WTI Crude and Brent Crude commanding a higher price, the diesel price rose to Rs.62.13 per litre on the 31st - the highest price for diesel in Punjab in that month.
- The cost of diesel reflected an upward trend at 6.73% for the month in Punjab attributed to the higher crude oil price as well as due to the slight gain of INR over the USD.
Diesel Price Trend In Punjab In February 2018
- Diesel price stood at Rs.62.22 per litre on the first day of the month, an increase of 9 paise over the previous day.
- The prices of the fuel continued to slightly increase in the first and second week of the month. The highest cost of diesel stood at Rs.62.32 per litre on the 6th and the 7th of the month.
- The hike in price in the first week was due to a higher demand for the crude oil in global markets.
- However, the price of diesel spiralled downwards in the second and the third week of the month with lowest diesel price recorded at Rs.60.30 per litre on the 25th.
- The reduction in the cost of diesel was attributed to the increase in the value of INR over the USD in the last few days of the month. Also, the Indian Basket price declined to $63.99 per barrel on the 28th compared to $65.12 per barrel on the 26th.
- On the last day of the month, the diesel price stood at Rs.60.31 per litre.
- Overall, the diesel price trend in Punjab for the month was downward at 3.17% which was impacted largely by the fall in prices of the crude oil and the value of the INR gaining over the USD.
Diesel Price Trend In Punjab In March 2018
- Diesel was priced at Rs.60.47 per litre on the 1st of March 2018, which was also the lowest price for the month.
- During the second and third week, the cost of diesel remained steady averaging nearly Rs.63 per litre before it started to increase by the end of the third and fourth week.
- The hike in diesel price was due to the increase in the global crude oil price which stood at $62.04 per barrel on the 14th and rose to $66.80 per barrel on the 26th of the month.
- With the Central and State Government not increasing the excise duty or the Value Added Tax (VAT) respectively, diesel prices were revised based on the price of the crude oil.
- On the closing day, the price of diesel stood at Rs.62.52 per litre - the highest for the month as well as for the quarter (January and March 2018).
- On the whole, diesel prices in March 2018 witnessed an upward trend at 3.34% largely impacted by the international crude oil prices.
State Taxes and Diesel Price in Punjab
As mentioned earlier, the state government of Punjab levies VAT on diesel. Currently it collects 17.33% VAT on a litre of diesel, which is lowest compared to the tax charged by its neighbouring states.
Rajasthan, for instance, charges the highest VAT on diesel among the aforementioned states at 25.74% per litre of diesel.
It is the state level tax that makes the price of diesel lower in Punjab compared to its bordering states.
How often Diesel Rates are Revised in Punjab
Diesel prices in Punjab, just like in other Indian states, are being revised on a daily basis as per the dynamic fuel pricing model introduced in India in June 2017.
The new pricing model mandates daily revision of diesel prices in line with the international crude oil prices and the currency exchange rate.
Prior to dynamic fuel pricing, diesel prices in India were revised once in 15 days, which used to give sudden price shocks to the customers.
With the new daily revision of diesel prices, any change in the global crude oil price and the exchange rate would be immediately transferred to the end customer. It also brings transparency in fuel pricing in India.
As per the new pricing model, all the petrol pumps should update the revised diesel price by 6 a.m every day. The oil companies will update the same to the petrol pump dealers by 8 p.m. the previous day.
While the automated fuel stations will get an auto update of revised fuel prices, the non-automated stations have to update the price manually.
Customers can find the daily revised diesel prices on the websites of the oil companies. For petrol pump specific diesel prices, they have to send an SMS with dealer code, which will be available at the respective fuel stations.
Effect of GST on Punjab Diesel Price
GST or the goods and services tax has been introduced in India with a tag line, ‘one nation, one tax’, which is self-explanatory. Following the implementation of GST, uniform tax is being observed on various products and services across India. However, diesel and other petroleum products still do not follow an uniform tax structure as they are kept outside the purview of GST.
Yes, diesel is not being taxed under GST but as per the old tax regime, where state and central governments levy separate taxes on the commodity. Hence, the effect of GST on the price of diesel is currently nil.
As bringing diesel and other petroleum products under GST regime is the most sought after reform across India, let us see what would happen to the price of diesel in Punjab if it is brought under GST.
Currently GST is being levied in four different tax brackets, the highest being 28%. Assuming diesel to be taxed under the highest tax rate, the total tax on a litre of diesel will be 28%.
The state of Punjab currently charges 17.34% VAT on a litre of diesel, while the central government is levying excise tax of Rs. 15.33/Lt, which is almost 26% on the current diesel price in Punjab. Together, the current taxes on diesel come to 43.34%, which are way higher than the highest tax bracket under GST. Therefore, bringing diesel under GST is more likely to bring its price by Rs. 13-14 per litre in Punjab.
Diesel Cost versus Petrol Costs in Punjab
As of 12 October 2017, a litre of diesel costs Rs.57.11 in Punjab, and petrol costs Rs.73.42/Lt. The price difference between the two commodities exceeds Rs.16 per litre, which is a matter to ponder on as both the fuels are extracted from the same crude.
Same crude, almost similar refining, same means of transportation, sold at same fuel station, but the price is different. What could be the culprit that is making petrol price higher than that of diesel? The simple answer is the tax. Yes, the tax all again. Apparently, for every problem related to fuel pricing in India, tax seems to be the main trouble maker. Let us see how.
While the VAT in Punjab is 17.34% on a litre of diesel, it is 36.11% on petrol. Similarly, the central excise duty on diesel is Rs.15.33/Lt and on petrol it is Rs.19.48/Lt. After knowing the tax rates, isn’t it quite obvious why petrol is priced higher than diesel.
Especially in Punjab, the price difference between petrol and diesel is high because of the high tax difference.
Also Check Diesel Price in NearBy Cities of Punjab
|Diesel Price In Chandigarh||Diesel Price In Ludhiana|
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