Diesel Rate in Punjab
Punjab is the north western state in India. The city of Chandigarh is the joint capital of Punjab and Haryana.
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.
Find the current Diesel price in Punjab and factors affecting petrol prices in India. The below Diesel price trend in Punjab offers insights such as the highest and lowest Diesel prices recorded during a month.
Trend of Diesel Price in Punjab for September 2019 (rates per litre)
|Highest Rate in September||Rs.62.11|
|Lowest Rate in September||Rs.61.98|
September - Week 1 (1-7):
- Diesel price in Punjab opened at Rs.62.11 per litre, unchanged from previous day’s closing price. State-run oil marketing companies decided not to cut prices due to weak demand of the oil.
- After staying stable for a couple of days, diesel rate in Punjab were slashed by 2 paise on the 5th of September, recording Rs.62.09 per litre. Diesel dropped further, closing the week at Rs.61.98 per litre. Meanwhile, in the international oil market, crude prices went up after US confirmed that talks with China to reach a trade pact would be held in the coming weeks. If talks are held and issues are resolved, it might help the global economy to surge.
- Overall performance of diesel in Punjab for the first week of September was -0.20%, trending downwards.
Trend of Diesel Price in Punjab for August 2019 (rates per litre):
|Highest Rate in August||Rs.62.85|
|Lowest Rate in August||Rs.61.98|
August 2019 – Week 1 (1-7):
- Diesel price in Punjab opened at Rs.62.85 per litre on 1 August, unchanged from last week’s price. State-run oil marketing companies decided not to change the rates of diesel in spite of weak demand of crude in the international market.
- Diesel rate remained unchanged for the next couple of days before slipping to Rs.62.81 per litre, recording a drop of 4 paise per litre. Meanwhile, in the international market, crude prices fell amid worries over weaker demand after the Trump administration said it would impose tariffs on more Chinese imports.
- Diesel closed the week unchanged at Rs.62.81 per litre. The overall decline of diesel price in Punjab was -0.06%. In the international oil market, crude price dropped owing to US-China trade tensions.
August 2019 – Week 2 (8-14):
- Price of diesel in Punjab opened at Rs.62.71 per litre on the second week of August, recording a 10 paise drop from previous day’s closing price.
- Diesel dipped further by 13 paise on the next day, standing at Rs.62.58 per litre. The drop was primarily due to the ongoing US-China trade tensions, fuelled further by the Trump administration’s decision to impose more tariffs on Chinese imports.
- Diesel rate in Punjab dropped slightly in the next few days before stabilising at Rs.62.28 per litre. The overall performance of diesel compared to the opening day was -0.90%, trending downwards. Meanwhile, in the international oil market, crude prices dropped due to possible supply cuts amidst looming global economic crisis.
August 2019 – Week 3 (15-21):
- Diesel in Punjab opened at Rs.62.28 per litre, unchanged from previous day’s closing price.
- Diesel slumped in the next few days, closing the week at Rs.61.98 per litre—its lowest recorded price in the month of August.
- The slump was primarily due to weak demand of the oil in the global market. Meanwhile, in the international oil industry, crude gained after US inventories recorded a substantial drop.
August 2019 – Week 4 (22-31):
- Diesel price in Punjab opened at Rs.61.98 per litre, unchanged from previous day’s closing price. It also happened to be the lowest recorded price for the month of August.
- Price of diesel in Punjab shot up on 26 August, recording Rs.62.20 per litre. Meanwhile, in the international oil market, crude gained after a substantial drop in US inventories.
- Diesel rate in punjab dropped soon after, closing the month at Rs.62.11 per litre. Overall all performance of diesel in the month of August was -1.17%, trending downwards.
Trend of Diesel Price in Punjab for July 2019 (rates per litre):
|Highest Rate in July||Rs.63.50 on 7 July|
|Lowest Rate in July||Rs.61.21 on 1 July|
July 2019 – Week 1 (1-7):
- Diesel price in Punjab was at Rs.61.21 per litre when the week began – the lowest diesel price recorded during the 1st week of July amid slight drop in crude prices in the international oil market.
- State-run Oil Marketing Companies (OMCs) hiked diesel rate in Punjab the next day by 5 paise per litre to stand at Rs.61.26 a litre and remained unchanged until 6 July before it was increased sharply by Rs.2.24 per litre on 7 July.
- The significant rise of 3.74% during the week is attributed to the rise in excise duty and cess on road and infrastructure by Rs.2 per litre even as the Finance Minister decided to impose additional duties on sale of petrol and diesel in the country to mop up revenue.
July 2019 – Week 2 (8-14):
- Diesel price in Punjab was recorded at Rs.63.42 per litre on 8 July, a slight decline when compared to the previous day’s closing price, which was recorded at Rs.63.50 per litre. The slump was primarily due to the OPEC deciding to extend supply cuts till March 2020 coupled with the ongoing US-China trade war that is speculated to have a negative impact on the global economy.
- Diesel rate in Punjab further dropped to Rs.63.32 per litre on 9 July, a decline of 10 paise per litre from the previous day’s closing price. After staying stable for a day, prices continued to decline, and recorded at Rs.63.08 per litre on 12 July. Oil supply cuts and investors looking for safe-haven investment channels like gold and silver amidst speculated global economic crisis contributed to the price decline.
- Diesel price in Punjab remained unchanged till the end of the week, thereby closing at Rs.63.08 per litre on 14 July. On the other hand, petrol prices continued to increase in the wake of a tropical storm in the Gulf of Mexico that prompted US oil producers to cut supplies by more than half the output.
July 2019 – Week 3 (15-21):
- Diesel price in Punjab stood at Rs.63.08 per litre on 15 July, unchanged from previous day’s closing price. Initially, the international oil market remained fairly balanced with OPEC and Russia deciding to extend supply cuts. However, on 15 July, crude prices dropped after China recorded its slowest quarterly economic growth in the last 27 years.
- Diesel rate in Punjab remained stable on the next few days amidst US stockpiles increasing, indicating weak demand. Surprisingly, diesel prices didn’t drop or increase amidst US-China and US-Iran tensions, and resumption of oil supplies from the Gulf of Mexico after the Hurricane Barry fiasco, which prompted US oil producers to cut supplies.
- Diesel in Punjab closed the week at Rs.63.08 per litre on 21 July. The price didn’t change throughout the week, though crude oil prices shot up due to ongoing US-Iran tensions. Speculation is rife that global crude prices can shot up in the following week if the US-Iran issue doesn’t stabilise or deteriorates further.
July 2019 – Week 4 (22-28):
- Diesel in Punjab was priced at Rs.63.08 per litre when the week began and remained unchanged until 24 July which was later reduced by 5 paise a litre to be sold at Rs.63.03 a litre. However, crude oil prices dropped after the International Energy Agency said it may act if tensions escalate in the Middle East.
- Diesel price in Punjab remained muted amid a fall in US inventories signaling a weak demand for crude as well as due to the US Navy said it may have shot down another Iranian drone escalating tensions in the region.
- By the end of the week, prices of diesel in Punjab was largely down amid a drop in crude oil prices amid weak demand for oil and the supply cuts led by the OPEC and its allies. Additionally, the IEA said that its unlikely that crude prices will incline sharply due to a weak demand.
Trend of Diesel Price in Punjab for June 2019 (rates per litre)
|2nd June||Rs.62.98 per litre|
|30th June||Rs.61.11 per litre|
|Highest Rate in June||Rs.62.98 per litre on 2 June|
|Lowest Rate in June||Rs.60.70 per litre from 20 – 23 June|
June 2019 – Week 1 (2-8):
- Diesel price in Punjab was at Rs.62.98 per litre on 2 June in Punjab, inclining marginally as against the previous day’s price even as crude prices declined in the global market.
- State-owned Oil Marketing Companies (OMCs), who fix the daily diesel price, cut diesel prices in Punjab on 3 June to be sold at Rs.62.60 per litre.
- Prices continued to slide over the week mainly impacted by the stabilisation of crude prices after plunging by more than 10% in the last four days.
June 2019 – Week 2 (9-15):
- On 9 June, diesel price in Punjab was at Rs.61.78 per litre, no change compared to the previous day’s price before it was increased the next day.
- Oil companies kept diesel prices in Punjab unchanged from 10 to 12 June when it was sold at Rs.61.30 per litre.
- During the week, diesel rate in Punjab declined by 92 paise over the opening price recorded at the start of the week due to the US and China trade war as it led to a slowdown in the global economy, and supply cuts led by the OPEC and its allies affected the prices to decline.
June 2019 – Week 3 (16-22):
- Diesel rate in Punjab opened the week at Rs.60.78 per litre as oil companies cut prices by 8 paise compared to the previous day’s price.
- This remained unchanged until 19 June as crude oil prices in the global oil market declined on signs of a slowing global economy amid the ongoing trade war between the US and China and the US sanctions on Iran.
- By the end of the week, diesel price in Punjab dropped further by 6 paise to be sold at Rs.60.72 per litre on 20 June, however, tensions in the Middle East as Iran shot a military drone and expectations for a cut in the rate of interest by the US Federal Reserve.
June 2019 – Week 4 (24-30):
- Diesel rate in Punjab priced Rs.60.83 per litre on 24 June, up by 11 paise compared to the previous day’s price and remained unchanged until 26 June.
- Prices continued to increase over the week with diesel closing at Rs.61.11 per litre even as crude prices dipped as traders awaited the outcome of the G20 summit and expectations of an interest rate cut by US Federal Reserve.
- Overall, diesel price in Punjab declined by 2.97% primarily due to the slump in crude oil prices in the global oil market due to supply cuts led by the OPEC and its allies even as the US imposed sanctions on Iran.
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.
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.
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
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