Diesel Price in Thanjavur
Diesel is a commodity. It is sold at a price. Unlike other commodities, diesel rate will differ in each state. For instance, diesel price in Thanjavur, a city in the Indian state of Tamil Nadu, is different from diesel price in Delhi. The difference is because of Value-added Tax. As on 27 June 2018, diesel rate in Thanjavur was Rs.71.82 a litre while in Delhi it was Rs.67.38 a lite. We can notice a price difference of Rs.3-4 per litre. On diesel per litre, VAT was 17.28% in Delhi and 24% in Tamil Nadu.
Revision of Diesel Price in Thanjavur
State-run fuel companies will review the rate of diesel under dynamic fuel pricing, which is a fresh mechanism used today. The mechanism will consider the variations in the exchange rate and the rate of unrefined oil on a daily basis. According to changes, a new price will be released at 06:00 a.m. The revision of fuel rates is done automatically at automated fuel stations. It has to be done manually at non-automated fuel stations. This is the reason why the price of diesel in the city of Thanjavur is changing every day. For instance, on 24 June 2018, diesel rate in Thanjavur was Rs.71.99 a litre. On 25 June 2018, it was down 7 paise to Rs.71.92 a litre. Fuel rate was further reduced by 10 paise per litre on 27 June 2018.
Prime Features of Dynamic Fuel Pricing
- It is a daily revision system.
- Many countries have deployed it, including India.
- Dynamic fuel pricing makes fuel pricing transparent.
Benefits of Dynamic Fuel Pricing to Fuel Consumers
- Customers will pay market-determined prices.
- Fuel companies will ensure the constant supply of diesel to end buyers in Thanjavur.
- Minute variations may also be shifted to customers.
Benefits of Dynamic Fuel Pricing to Fuel Companies
- Fuel companies can reduce the amount of working capital required to manage regular business activities.
- Stock or inventory can be effectively maintained.
- Dynamic fuel pricing allows the mechanisation of fuel companies.
Tips for Tracing Diesel Rate in Thanjavur
Diesel customers in Thanjavur can make use of offline and online methods in order to trace the latest fuel price. Usually, consumers will visit the nearest supply station to get the price details. They can now use mobile applications developed and provided by Bharat Petroleum, Hindustan Petroleum and Indian Oil. Mobile applications have gained popularity within a short period of time. Each application is easy to use. BPCL customers may use SmartDrive while IOCL customers may use Fuel@IOC. Likewise, HPCL consumers may use My HPCL.
You should have a smartphone so that you can download the mobile application of your choice and use. Or else, you may use SMS services to quickly get the price details. To make an SMS request, you should have a dealer code. Fuel supply stations of BPCL, IOCL and HPCL will display the dealer code for you. The format for sending the SMS request for IOCL customer is, RSP DEALER CODE to 9224992249. For HPCL customers, the format for sending the SMS request is, HPPRICE DEALER CODE to 9222201122. The format for forwarding the SMS request for BPCL customers is, RSP Dealer Code to 9223112222.
Evaluation of Diesel Price in Thanjavur
Fuel retailers will use the following equation to compute the fuel price in Thanjavur:
Crude oil costs + excise duty + Value-added Tax (VAT) + commission for dealers + OMC expenses + pollution cess
Oil companies need crude oil to extract diesel and petrol. They import crude oil from overseas markets in a bigger scale since the domestic production will not meet the oil requirements of the country. Crude oil is of two categories, which include Brent crude oil and WTI crude oil. In India, the benchmark price is considered. The benchmark price is the average price of WTI crude and Brent Crude. It will change every day. Reliable sources confirmed that the crude oil price as of 3 June 2018 was $78.3 per barrel or Rs.5,245 per barrel.
Excise duty is a central tax imposed on diesel by the Central Government. It can be increased or decreased whenever required. Excise duty cannot be the same on petrol and diesel since diesel is a subsidised fuel in the country. When the BJP formed the government in the year 2014, excise duty on diesel was Rs.3.46 per litre. Over the next three years, it was increased to Rs.17.33 per litre. The government reduced it by Rs.2 per litre in October 2017.
VAT stands for Value-added Tax. It is a state level tax. Each state has a different VAT structure. It was imposed at 24% in Tamil Nadu in June 2018. VAT is always expressed in terms of percentage. On the other hand, excise duty is expressed in terms of rupees. Like excise duty, VAT can also be revised if required. Maharashtra, Uttar Pradesh, Madhya Pradesh and Gujarat have reduced it by Rs.2 per litre in October 2017. It was not changed in Tamil Nadu.
OMC expenses are a part of the retail selling price of diesel in Thanjavur. They include refinery transfer price, entry levies, landing overheads, operational costs, freight expenses, profit margin of Oil Marketing Companies, transportation overheads, etc. In June 2018, the total amount of expenses spent by OMCs was Rs.8 per litre. These expenses are revised whenever required.
Forces Affecting Diesel Price in Thanjavur
Both external and internal factors will influence the pricing of diesel. External factors include crude oil costs and the exchange rate. Crude oil is supplied globally by OPEC and other nations. Crude oil suppliers will fix the price considering various aspects. The factors affecting the price of crude oil include production cuts, political conditions in oil exporting countries, the supply and demand for crude oil, etc. Production cuts are declared if there is bad weather. When the production cuts are declared, the extraction of unrefined oil shall be affected. Finally, the changes in the rate of unrefined oil will directly affect fuel rates in Thanjavur.
Another external factor affecting the fuel price is the exchange rate, which depends on several aspects. The USD/INR is a volatile currency pair. It is one of the most traded currency pairs in the world. Crude oil rates and the USD/INR exchange rate are inversely related. On a daily basis, the exchange rate will be revised. A weaker dollar will boost the price of crude oil while an appreciated dollar will reduce the crude oil rate. In the end, any changes in the exchange rate will directly impact fuel prices in Thanjavur.
Internal factors affecting the fuel rate include excise duty and Value-added Tax. When the Central Government increases excise duty, diesel price will increase. When the Central Government decreases excise duty, diesel rate will decrease. Similarly, when the State Government of Tamil Nadu increases VAT, fuel rates in Thanjavur will increase. If VAT is decreased by the State Government of Tamil Nadu, then fuel prices will fall.
Effect of GST System on Diesel Price in Thanjavur
Will the government accept the proposal of implementing GST on diesel? Market watchers are of the opinion that if the Central Government implements GST on diesel, diesel rate will reduce. Let’s consider the case of New Delhi. If diesel is taxed at 12%, diesel shall be priced lower than Rs.37 per litre in the national capital. When GST is levied at 28%, the fuel rate will be lower than Rs.40 per litre. Similarly, the imposition of the present tax framework on diesel will also reduce diesel price in Thanjavur. It is not only diesel but also petroleum products are currently not taxed under GST. According to recent reports, the government may impose GST on diesel by retaining the existing VAT structure. If this is the case, diesel price in Thanjavur will remain unaffected by the imposition of GST.
*Disclaimer: BankBazaar makes no guarantee or warranty on the accuracy of the data provided on this page, the prevailing prices are susceptible to change and provided on an as-is basis. We accept no liability for any loss arising from the use of the data contained on this website.