Diesel Price in Shimoga
Fuel companies will revise the price of diesel not only in Shimoga but also in other towns in India on a daily basis. They shall take into account the price of unrefined oil in overseas markets and the conversion rate of the Indian rupee against the US dollar. The system of daily revision is called dynamic fuel pricing. Under this system, fuel rates may decline or increase tomorrow. If there are no major variations in crude oil rates and the currency translation rate, fuel rates will not be changed.
Hindustan Petroleum Corporation Limited, Indian Oil Corporation Limited and Bharat Petroleum Corporation Limited have been following the system of dynamic fuel pricing since June 2017. Prior to the introduction of dynamic fuel pricing in India, both petrol and diesel rates used to be revised twice a month. On 1st of every month, the first revision used to befall and on 16th of every month, the second revision used to occur. In India, fortnightly-based revision was used by these fuel companies for 15 years.
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Diesel Price Trend in Shimoga
What was the diesel price trend in the city of Shimoga over the last 4-5 months? Fuel retailers have accelerated diesel rates drastically in sync with several aspects. The month of January 2018 has produced an upward trend. Fuel rates in Shimoga were down marginally in the month of February 2018. They further started increasing. As a result, diesel rates in the city have produced a growing trend in March 2018, April 2018, and May 2018. The first five months of the present calendar year have produced a price rise of Rs.6-7 a litre. The upward trend is expected to continue.
Benefits of Dynamic Fuel Pricing
Many countries have implemented dynamic fuel pricing to benefit end fuel consumers and fuel retailers. The system has benefited both industry participants a lot. Fuel companies can keep their customers happy by uninterruptedly supplying the fuel under this system. It is possible because of the daily revision of fuel prices. Importantly, the prices of both diesel and petrol are set transparently. Fuel buyers in the city of Shimoga cannot anticipate huge variations in rates. In other words, manor variations can also be transmitted to consumers.
We all understand the importance of managing working capital effectively. What is working capital? In Finance, working capital is the minimum capital required to maintain regular business operations. Technically, the difference between current liabilities and current assets is called working capital. The effective management of working capital is extremely essential for big companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum. With dynamic fuel pricing in place, working capital is effectively managed today.
How can I Trace the Latest Diesel Price in Shimoga?
No matter which type of diesel buyer you are, make sure to trace the latest diesel rate in Shimoga. How? You do not have to visit the nearest fuel center to get the price unlike before. Instead, you can use the facilities provided by your fuel brand. A diesel consumer has an option of using mobile applications. Indian Oil has designed a mobile application called Fuel@IOC for its customers. Similarly, a mobile application called My HPCL is offered by Hindustan Petroleum. The name of the mobile application offered by Bharat Petroleum is SmartDrive. You just need to download the mobile application of your choice to instantly trace today’s diesel price in Shimoga.
Computation of Diesel Rate in Shimoga
Most fuel consumers would like to understand the process followed to compute the retail selling price of the fuel. As on 21 June 2018, the price of diesel in Shimoga was Rs.69.40 a litre. How was this price fixed? Diesel rates are determined by fuel marketers by adding the expenses incurred for importing crude oil, the total amount of expenditures incurred by fuel companies, excise duty, commission for diesel dealers, Value-added Tax, etc.
As on 3 June 2018, according to official sources, the cost of a litre of unrefined oil stood at Rs.32.98; the expenditures spent by fuel companies were estimated to be Rs.8 on diesel per litre; excise duty stood at Rs.15.33 a litre; VAT was charged at 18.25%; and the commission charged by dealers was Rs.2.53 a litre. Taxes are a major cost aspect of the RSP of diesel. More than 50% of the RSP is paid in the form of taxes. It is something interesting to notice.
Factors impacting Diesel Price in Shimoga
Crude oil is a raw material required to produce diesel. Since India does not have enough resources, the country borrows crude oil. The pricing of crude oil affects fuel rates. Various aspects are taken into consideration to determine crude oil rates. If the extraction of crude oil is disturbed by bad weather, crude oil rates will increase and, therefore, fuel rates will increase. Taxes play an important role and can be changed.
For instance, excise duty on diesel in 2014 was Rs.3.46 a litre. After three years, it was further increased to Rs.17.33 a litre. In October 2017, the government reduced it to Rs.15.33 a litre. Based on the revisions, fuel rates will be determined. If there is a rise in excise duty, diesel price in Shimoga will increase. If there is a downfall in excise duty, fuel rates will fall proportionately. Likewise, Value-added Tax also has the similar effect.
What is the Impact of GST on Fuel Rates in Shimoga?
Goods and Services Tax (GST), which is a common tax system, is applicable to all types of goods and services. Customers will pay GST when they purchase something. Each product attracts a certain GST rate. It may be 5% or 12% or 18% or 28%. Interestingly, both petrol and diesel will not fall under GST. So, GST does not affect diesel rates. When GST is levied on diesel, the price of diesel in the city of Shimoga will fall by 30-35%. Government officials have said that GST has to be imposed in addition to Value-added Tax to balance the same level of earnings.
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