Diesel Price In Warangal
The diesel price in Warangal has seen a lot of fluctuations in the recent times and this is due to various factors associated with it. India imports about four-fifths of crude oil from other countries, and since it is one of the key components in extracting fuel from, it makes it highly expensive for commodities like diesel and petrol while reaching the retail market.
Before, we discuss about the various factors that affect the diesel rates in Warangal, here is a quick introduction to this place.
Warangal is an urban city that is located in the state of Telangana. It is the second most popular and biggest city after Hyderabad. Spread across an area of 406.87 sq.km, Warangal is also been titled as one of the “smart cities in India“ and makes it ideal for business investments and to expand the industrial opportunities.
|Also Know: Petrol Price In Warangal|
Besides being well known for its agro-based and IT industries, Warangal is also into mineral-based sectors like bricks, cement blocks, cement concretes, granite lime, mosaic tiles, granite tiles, hydrated lime, coal, fuel, etc.
|Also Check: Diesel Price in Telangana|
Factors That Affect Diesel Price In Warangal
Though there are various factors that affect the fuel prices in India, the primary ones are listed below:
1. International Crude Oil Prices
Crude oil is one of the major raw materials for diesel. Currently, India’s 75% of the crude oil requirements are met via imports. Therefore, international crude oil prices and FER (Foreign Exchange Rates) make the most important components while pricing diesel and petrol.
Though they only form a small segment of total retail price of diesel, there are multiple factors that determine the final price. In fact, over 58% of the retail price of diesel per liter goes towards duties, taxes, dealer margins, and cesses.
2. Oil Production Companies
Oil Production Company is a company, which is responsible for manufacturing crude oil. This is taken care by both private and public sector companies. The examples for private sector companies include Cairn India Limited, Reliance Industries Limited whereas public sector companies include Oil India, ONGC (Oil and Natural Gas Corporation), etc. Nevertheless, these companies cater together only about 24% of total crude oil needs in India. Therefore, the rest is imported.
3. Oil Marketing Companies
Crude oil that s manufactured is further purchased by the OMCs (Oil Marketing Companies). These are companies that take care of not only the crude oil but also handles every phase of it until is being handed over to a dealer.
This field also has private and public companies to do the job. However, the three networks that rule 95% of this market are:
- IOCL – Indian Oil Corporation Limited
- BPCL – Bharat Petroleum Corporation Limited
- HPCL – Hindustan Private Corporation Limited
The rest 5% is taken care of a few private sector companies, which are:
- Reliance Industries
Diesel rates are highly influenced by dealers as well. A dealer is a person or a business, who owns a petrol pump or petrol station. In other words, they are the ones dealing the fuel and bringing it to the consumers for daily use. They are the sellers of fuel, who trade the commodity at a retail price, after adding their margins and taxes.
How Are Diesel Rates Determined In Warangal?
India, now, uses the mechanism of “dynamic fuel pricing.“ It was implemented on June 16, 2017 to overcome the issues with the pricing system that was used earlier.
Before the dynamic system came into effect, the fuel prices were updated on the first and sixteenth day of each month or perhaps, on a fortnight basis at 8:00 a.m. Hence, it was called “fortnight fuel pricing system.“
However, this pricing system had multiple issues. To overcome them and to bring better transparency in the system as well as to prevent the governments to influence or affect the prices, a concept that was used by many developed nations was employed.
According to the dynamic fuel pricing system, the prices are updated every morning at 6:00 a.m. IST (Indian Standard System).
Why Was Dynamic Fuel Pricing Implemented?
According to the OMCs (Oil Marketing Companies), the step was taken to make sure that the benefits of even the slightest modification in the international crude oil rates could be passed on to the dealers as well as the consumers.
Apart from this being the primary reason, this step was also taken to bring better transparency in the system and to eliminate bigger leaps in prices, which were being affected on a fortnight basis.
Is Dynamic Fuel Pricing Implemented In Warangal?
Yes, the mechanism is not only implemented in Warangal but also in every region in India.
Does GST Influence The Diesel Rates In Warangal?
No, GST does not have any affect on diesel prices at Warangal as of now. Bringing petroleum products under the GST scheme has been planned for a long time now. However, Aurn Jaitley, the Union Finance Minister supported the idea of bringing the commodities like diesel, cooking gas, and petrol under the GST (Goods and Service Tax) regime.
However, this might take a lot of time and important governments involved. Since BJP has powered about 19+ states in India, it wouldn’t be long if this decision is implemented.
Also Check Diesel Price in NearBy Cities of Warangal
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