Diesel Price in Varanasi
Diesel prices are increasing rapidly nowadays. They have crossed their 4-year highs in January 2018 in all cities, including Varanasi. The diesel price is not domestically controlled since it is not fully produced within the country. India borrows crude oil in a bigger scale from OPEC countries. Only 25% is met through home production. Therefore, fuel rates are reliant on overseas factors to a larger extent. They tend to vary within the country because of the dealer’s commission and the VAT element.
Analysis of Diesel Price in Varanasi
In March 2018, diesel was retailed with an average price of Rs.63.40 a litre. The average diesel price in the previous month was Rs.63.50 a litre. It was lower than Rs.60.74 a litre in January 2018. The diesel rate in the city is expected to rise by 2-3 rupees by the end of 2018. The rate is inclusive of primarily two classes of taxes, which include the central-level tax and the state-level tax. On diesel, the central-level tax has been revised to Rs.15.33 a litre. The state-level tax, which is the VAT component, was 20.19% as of September 2017.
|Also Know: Diesel Price in Uttar Pradesh|
Revision of Diesel Price in Varanasi
There has to a specified fuel pricing methodology in each country. In the month of June 2017, the Indian oil corporations espoused dynamic fuel pricing substituting the earlier fortnightly-based revision. Dynamic fuel pricing is an advanced version of the previous fuel pricing system. According to which, all the three state-owned oil companies – Bharat Petroleum Corporations Limited, Hindustan Petroleum Corporation Limited and Indian Oil, are compelled to update fuel prices in line with the exchange value of the INR against the USD and the market value of crude oil.
Benefits of Dynamic Fuel Pricing to Fuel Consumers in Varanasi
Fuel consumers from the city of Varanasi will no longer face the problem of inventory. In other words, dynamic fuel pricing assures the steady supply of the fuel throughout the year. They are assured that the revision of fuel rates will be done transparently. Even the lowest change is quickly shifted to them without requiring to wait for a period of 15 days. More importantly, they can be marked to overseas market crescendos.
Benefits of Dynamic Fuel Pricing to Oil Companies in Varanasi
Oil selling corporations are greatly benefited from dynamic fuel pricing, which is sometimes referred to as the daily price revision. They are allowed to easily minimize the amount required to run day-to-day activities and manage cash incomings and outgoings flawlessly. Oil selling companies can also enhance the operational efficiency of dynamic fuel pricing enables their mechanization drive.
Simple Ways to Trace Today’s Diesel Price in Varanasi
Today’s diesel rate in Varanasi can be easily obtained through several ways. Downloading the mobile application(s) is the easiest way. Today, you have three mobile applications to consider. They are SmartDrive, My HPCL and Fuel@IOC. SmartDrive, a mobile application crafted by Bharat Petroleum Corporation Limited, is simple to access. My HPCL, a mobile application formulated by Hindustan Petroleum Corporation Limited, is useful not only to obtain the latest fuel price in Varanasi but also to extract details related to general insurance. The mobile application introduced by Indian Oil Corporation is Fuel@IOC. If you are using smartphones, be advised to make use of these mobile applications.
Steps in Computing Diesel Price in Varanasi
Step 1: Unrefined oil is a raw material required to extract diesel in India. Oil selling companies, abbreviated as OMCs, will buy crude oil from oil-extracting economies. The expenses incurred to buy crude oil is called as the cost of crude oil. As of March 2018, it was $65 a barrel. The cost of a litre of unrefined oil is computed considering the exchange rate.
Step 2: Oil selling companies will stock the imported crude oil. It then delivers to refineries. To convert crude oil into diesel, they incur several expenses, including Refinery Transfer Price, import taxes, operational expenses, etc. On an average, the expenses spent by oil companies will be Rs.8.30 per litre.
Step 3: After adding their profit margin, diesel will be sold to fuel retailers who finally supply the fuel to end users in Varanasi. Retailers add their commission of Rs.Rs.2.58 per litre as of March 2018.
Step 4: The final price, which is quoted to diesel buyers in the city, is inclusive of taxes. Oil selling entities in India have a major role to play as far as fuel pricing is concerned. The scope of the government is restricted only to imposing taxes.
Elements Impacting Recent Diesel Price in Varanasi
Diesel rates in Varanasi will change because of three reasons, which include the INR/USD exchange rate, the market price of unrefined oil, the tax levied by the state government and the tax imposed by the Central Government. The cost price of unrefined oil will be lowered when the USD devalues against the INR and vice versa. In the end, fuel prices in Varanasi are affected. The INR/USD exchange ratio is determined by the country’s Central Bank in sync with the inflation rate, the export and import policies, the bank interest rates, etc.
The VAT component affects the fuel price. Let’s consider the latest movements. After cutting the excise duty by Rs.2 a litre, the Government of India had asked all the Indian states to cut the local tax. No other states have reduced the local tax except Maharashtra, Uttar Pradesh, Madhya Pradesh and Gujarat. Fuel consumers in the country had expected that the Government of India will decline the central levy in the Union Budget 2018-2019. Though it had made a few changes, fuel rates (petrol prices and diesel prices) in the city of Varanasi retained unaffected.
Impact of GST on Diesel Price in Varanasi
Do you think the current tax mechanism impacts the fuel rates in the city? If you say ‘Yes,’ you are wrong. The GST framework does not include diesel and petrol as well. As we all know, in excess of 50% of the Retail Selling Price of diesel will go towards taxes. If the GST framework is levied on diesel, the existing taxes should be substituted by the highest GST tax rate, which is 28%. It has been computed that the current diesel rate in Varanasi will slide by more than 20%. Eventually, both the Central Government and the State Government of Uttar Pradesh have to incur losses.
*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.