Diesel Price in Visakhapatnam
Fast becoming a major tourist destination in South India, Visakhapatnam is also the financial capital of the state of Andhra Pradesh. The city has been selected to be a part of the country’s ‘Smart City Mission’ to be developed with modern infrastructure to make the city citizen friendly and sustainable.
Commuters’ preferred mode of transport are buses, auto rickshaws and taxis. Two-wheelers and four-wheelers are increasingly adding to the vehicular density of Visakhapatnam or Vizag. The port city of Visakhapatnam has witnessed an increase in vehicular population and the consumption of diesel has inclined.
|Also Know: Petrol Price In Visakhapatnam|
Diesel is mostly used by the public transport system, while private cars have been utilising the fuel extensively in the recent past. Diesel prices in Visakhapatnam fluctuate daily based on international and domestic elements. The city is well supported by fuel stations by State-owned oil companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum.
Diesel Price Breakup in Visakhapatnam
The diesel price breakup includes several components which make up the Retail Selling Price (RSP). Here’s the breakup of each of these component which form the final selling price of diesel recorded on 3 June 2018.
|1||International Crude Oil Price + Freight Charges||$78.30 per barrel = Rs.32.98/Litre (considering $1=66.96 and 1 barrel oil = 159 litres)|
|2||Profit margin of Oil Companies, transportation, refining, and operational costs||Rs.7.60/Ltr|
|3||Central Excise Duty + Road Cess||Rs.15.33/Ltr|
|5||Value Added Tax (VAT) + 25p Pollution Cess with surcharge||Rs.16.72/Ltr|
|Total||Retail selling price of diesel in Visakhapatnam||Rs.75.15/Ltr|
Influencers of the Diesel Price in Visakhapatnam
Diesel prices are dynamic in nature and are revised on a daily basis in India. Due to the change in the price of the global crude oil, diesel prices are updated daily in sync with the international oil rate. Apart from the crude oil price, the US dollar exchange rate, taxes and operational costs influence the diesel price. Let’s review each of these elements to understand how diesel prices are influenced by external and internal factors.
- Global Crude Price: India imports more than 70% of crude oil from oil-producing countries. Crude oil is the largest imported commodity in India which makes it an expensive product. Hence, any fluctuation in the crude oil prices impacts the diesel price in the country. Crude or unrefined oil price changes due to the trend in the demand and supply, geopolitical tensions, increase or decrease in production. Any production cuts or shortage in supply leads to the rise in crude oil rate, subsequently the diesel price in the city.
- US Dollar Exchange Rate: Trading of crude oil in the global market happens in US dollars, therefore, any variations in the exchange rate of the dollar tends to revise the crude oil price in the market. If the US dollar appreciates, the value to purchase crude oil increases and vice versa. When oil companies purchase a barrel of crude oil, if the Indian Rupee is weaker over the US dollar, the cost to buy oil rises thereby increasing the diesel price in Visakhapatnam.
- Tax on Diesel in Visakhapatnam: The biggest component in the pricing structure of diesel are the taxes levied by the Centre and the respective State. While the excise duty is uniform across the country, charged at Rs.15.33 per litre, the sales tax or Value Added Tax levied by the state of Andhra Pradesh is 28.60%. Therefore, any changes to the tax rates leads to a revision in the diesel price.
- OMCs’ Profit Margin & Dealer Commission: Oil companies transport crude oil from oil-producing countries, refine it to diesel and transport it to fuel stations across the country. These companies include their profit margins and other operational costs to the retail selling price of diesel. Also, they add commission to dealers or fuel station owners to the final selling price of diesel in the country. Any revision in these charges leads to fluctuations in the diesel price in Visakhapatnam.
Methods to Track the Current Diesel Price in Visakhapatnam
Now that we understand why diesel prices are dynamic in nature, there are several methods to track the current diesel price in a city. OMCs have introduced several innovative methods to find the latest fuel prices.
- Mobile Apps: Indian Oil’s Fuel@IOC, Bharat Petroleum’s SmartDrive and Hindustan Petroleum’s MY HPCL apps help in tracking the current diesel price in cities such as Visakhapatnam.
SMS: Consumers can take advantage of the SMS service offered by oil companies. Follow the process below to get the latest fuel price in a city.
- IOC: SMS RSP Dealer Code and send SMS to 9224992249.
- BPCL: SMS RSP Dealer Code and send SMS to 9223112222.
- HPCL: SMS HPPRICE Dealer code and send SMS to 9222201122.
- Oil-Companies’ Online Portal: Oil companies update their respective website with the latest diesel price in Visakhapatnam and in across cities in the country.
Why does Diesel Prices Change Daily in Visakhapatnam?
Currently, diesel prices are revised under the ‘dynamic fuel pricing’ mechanism. Under this mechanism, fuel retailers include the previous day’s crude oil price and the US dollar exchange value to arrive at the final selling price of diesel. Prior to the new method of pricing, oil companies used to revise diesel rates on a fortnightly basis. However, this led to losses by the fuel companies as they were unable to pass on the changes, if any, to the consumer.
To offset the losses, the dynamic fuel pricing mechanism was introduced. This pricing mechanism helped oil companies to pass the reduction or increase in fuel prices to the consumer instantly and wait till the fortnightly revision.
GST on Diesel in Visakhapatnam
Trading of goods and service come under the new taxation regime of Goods and Service Tax (GST). However, petroleum products such as diesel and petrol have been exempted currently. The revenue earned by the government through excise duty and VAT is higher compared to the revenue earned through the GST. Since the current taxes are higher compared to the highest tax slab of GST, the government has not brought diesel under the purview of GST.
That said, if the government decides to bring diesel under the framework of GST, the diesel price in Visakhapatnam and in across cities will fall significantly.
Also Check Diesel Price in NearBy Cities of Visakhapatnam
*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.