Petrol Price In Coimbatore Today

Attributes of Dynamic Fuel Pricing

1. Fuel rates in Coimbatore will change on a daily basis at HPCL, BPCL and IOCL.
2. Fuel entities may or may not increase the fuel rate. Sometimes, they will extend the same price range.
3. Fuel is priced in a way that is free from political influences.

Benefits of Dynamic Fuel Pricing to OMCs

1. Stocks and cash are effectively managed.
2. OMCs can save money and time.
3. They can computerise their operations to implement the system of dynamic fuel pricing.

Methods to Trace Today's Petrol Price in Coimbatore

Calculation of Petrol Price in Coimbatore

Petrol rate in Coimbatore = Crude oil costs + taxes + commission for dealers + OMC expenses

1. Crude oil cost is a major cost component, which will change periodically. The combined price of Brent and WTI crude is considered. It will change on the crude oil market. In April 2018, the aggregated crude oil price stood at $69.30 per barrel. It will first be converted into Indian rupees and will be divided by 159 since a barrel of crude oil is equal to 159 litres.
2. Excise duty and Value-added Tax are imposed on petrol. No other taxes are levied apart from these two. Over the last three months, no changes were made as far as excise duty is concerned. It was Rs.19.48 a litre in May 2018. Likewise, VAT has not been revised recently by the State Government of Tamil Nadu. It was collected at 32.06% during the same month.
3. Oil Marketing Companies are required to spend several types of overheads, which include operating overheads, landing overheads, entry levies, refinery overheads, freight expenses, carriage overheads, etc. The overall sum of the overheads spent by OMCs was estimated to be Rs.6.10 per litre.

Factors Impacting Fuel Rates in Coimbatore

Internal factors: Excise duty and Value-added Tax are domestically governed. For instance, the Central Government retains the authority to make changes in excise duty. The NDA Government revised it many times since 2014. If the government revises excise duty, petrol price should be revised. Similarly, if there are any changes in VAT, fuel companies will make necessary changes.

External factors: The exchange rate has to be taken into consideration since crude oil is an overseas commodity. Crude oil costs and the USD/INR exchange rate are inversely related. When the overseas currency weakens, crude oil rates will reduce proportionally. On the contrary, when the base currency strengthens, crude oil rates will also increase. Fuel prices will get affected in the end.

Impact of GST on Current Petrol Rate in Coimbatore

Goods and Services Tax (GST) is a multi-stage tax framework. It is paid by the people who purchase goods and services at different tax slabs. Petrol and diesel buyers will not pay GST. The have continued to pay the current tax. VAT and excise duty should be compensated if the GST Committee wishes to include petrol. If implemented at 28%, the current petrol price in Coimbatore will deteriorate by 20-30% as per specialists. Moreover, compliance overheads are expected to increase by 100%.