Introduction to Fuel Pricing in India
Petrol is an essential commodity in our day-to-day life. We use it mainly for the purpose of transportation. The price, which is charged at petrol pumps, is the retail price of petrol for consumers. Have you ever questioned yourself that how petrol rates in India are computed? Which are the influencers of the cost of petrol? Whether or not petrol has been covered under the regime of GST? These are very important questions from the stance of petrol users someone like you. Let’s get into the discussion.
Daily Revision of Petrol and Diesel Prices in India (Dynamic Fuel Pricing)
How are petrol and diesel prices in India determined today? We have a new fuel pricing mechanism in place called dynamic fuel pricing, which is also called daily revision of fuel rates. The new pricing system was introduced in India on 16th June 2017 after conducting a long 40-day trial in five cities - Chandigarh, Udaipur, Jamshedpur, Puducherry, Vishakhapatnam.
Under this system, fuel rates are revised on a daily basis considering global crude oil rates and the rate of currency conversion. The system is in practice across 58,000 petrol bunks in India. The system brings transparency and addresses complexities involved in the previous fortnightly-based revision. It lets fuel users pay market-determined prices despite the impact.
Petrol and diesel rates are revised at 06:00 a.m. every day.
There are two categories of petrol bunks:
- Automated, which automatically modify rates with no human intervention and
- Non-automated, which manually revise. Only 20% out of 58,000 petrol bunks are automated and the rest are non-automated. The revised rates shall be displayed at bunks for the public.
How to Check Petrol Prices in India every day?
State-owned oil marketing entities account for at least 90% of retail fuel stations in India. Renowned oil brands such as Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL), and Indian Oil have strategically designed a few initiatives that help consumers spot the latest rates.
Here is How You Can Track Petrol Prices Regularly:
|SMS service||Type: HPPRICE DEALER CODE and send it to 9222201122||Type: RSP DEALER CODE and send it to 9223112222||Type: RSP DEALER CODE and send it to 9224992249|
|Online Service||Visit www.hindustanpetroleum.com and then go to “Pump Locator”||Visit www.bharatpetroleum.in and then go to “Pump Locator”||Visit www.iocl.com and then go to “Pump Locator”|
Petrol Price Trend in India between October and December 2018
|Opening date price||Rs.75.17 a litre||Rs.73.83 a litre||Rs.67.43 a litre|
|Closing date price||Rs.73.83 a litre||Rs.67.81 a litre||Rs.62.86 a litre|
|Highest price||Rs.75.74 a litre registered on the 17th||Rs.73.83 a litre registered on the 1st||Rs.67.43 a litre registered on the 1st|
|Lowest price||Rs.73.83 a litre registered on the 31st||Rs.67.81 a litre registered on the 30th||Rs.62.86 a litre registered on the 31st|
Petrol Price Trend in India between October and December 2018
- A number of factors influence petrol prices in India, such as the crude oil rates, excise duties and VAT, among others.
- Petrol prices in Mumbai are higher than other metro cities owing to heavy taxes. Since Indian oil companies have been following dynamic fuel pricing, petrol and diesel prices will not be the same throughout the month.
- On the basis of the exchange rate and the crude oil rate per barrel, oil enterprises like Hindustan Petroleum, Bharat Petroleum and Indian Oil will decide whether to increase or decrease the price. If there are no major changes, the companies do not change fuel prices.
- As of 1 October, the price of petrol per litre was Rs.75.17. It climbed by 14 paise per litre the following day.
- Because of the reduction in excise duty, on 5 October, petrol prices in all the 4 metro cities were down by Rs.2.5 per litre.
- In week 2 and week 3 of October, fuel rates were highly volatile. Petrol stood at Rs.74.78 a litre on the 26th, 27th and 28th of October.
- Because of a steady fall in crude oil prices, petrol prices in India decreased by more than 8% in November. Oil companies sold petrol at an average price of Rs.71.75 a litre in the month of November in the national capital.
- In the first two months, no changes were made among domestic influencers such as the OMC expenses, dealer’s commission, etc.
- For the month of November, the opening date price stood at Rs.77.37 a litre and the closing date price at Rs.70.98 a litre in Mumbai.
- For the same month, the opening date price stood at Rs.75.68 a litre and the closing date price at Rs.69.65 a litre in Kolkata.
- In Delhi, in the first week, the average fuel rate stood at Rs.71.83 a litre in December. It fell to Rs.70.47 a litre in the following week. Similarly, the weekly average price kept decreasing in week 3 and week 4 across metro cities in the same month.
- Within a span of three months, crude oil price reduced by $23 per barrel. Thus, public sector oil enterprises – Hindustan Petroleum, Indian Oil and Bharat Petroleum – decreased the fuel price by over Rs.12 per litre across India.
Note: The pricing of petrol and diesel is based on the price of crude oil (Indian crude) in India.
Petrol Price Trend in India Between April and June 2018
|Opening date price||Rs.73.73 per litre||Rs.74.63 per litre||Rs.78.33 per litre|
|Closing date price||Rs.74.63 per litre||Rs.78.39 per litre||Rs.75.55 per litre|
|Highest price||Rs.74.67 per litre recorded on 24th||Rs.78.47 per litre recorded on 29th||Rs.78.33 per litre recorded on 1st|
|Lowest price||Rs.73.73 per litre recorded on 1st||Rs.74.63 per litre recorded from 1st to 11th||Rs.75.55 per litre recorded from 27th to 30th|
Petrol Price Trend in India in April 2018
- On 1st April 2018, the petrol price in India stood at Rs.74.73 per litre, which is also the lowest petrol price recorded in the month.
- During the first week, petrol prices in India increased slightly by as much as 39 paise in tandem with the rise of global crude oil prices.
- With the incline in trend during the first week, petrol prices in India declined during the second week attributed to the decrease in crude oil rates.
- The incline in the WTI crude and Brent crude prices, petrol rates rose in the third and fourth week of April 2018.
- The highest petrol price in India in April 2018 stood at Rs.74.67 a litre on the 24th owing to the rise in crude oil prices.
- The increase in petrol prices was not attributed to any domestic factors such as the Centre’s excise duty and the State’s VAT rates as they were not revised
- Petrol prices in India witnessed an upward trend in April 2018 by 1.22% largely impacted by the rise in crude oil rates and the appreciation of the US Dollar value over rupee.
Petrol Price Trend in India in May 2018
- The petrol price in India on 1st May 2018 stood at Rs.74.63 a litre and remained the same till the 11th as oil companies didn’t revise fuel prices owing to the 2018 Karnataka Assembly Election.
- The lowest petrol price in India in May 2018 stood at Rs.74.63 per litre and continued to remain the same till 11th.
- After the 11th, petrol prices in India rose in the third and fourth week. During the third week, the petrol price in India increased by 73 paise per litre in tandem with the rising crude oil prices.
- The crude oil rate hit its highest level since November 2014, touching $80 per barrel as geopolitical tensions caused concerns to rise over potential disruption in supplies.
- The US administration’s decision to unilaterally exit from the nuclear deal with Iran led to an increase in crude oil rates with the apprehension that Iranian crude oil output would fall.
- Petrol prices in India rose to touch an all-time high of Rs.78.47 per on the 29th May 2018 though it declined marginally over the next couple of days.
- The petrol price trend in India during the month of May 2018 reflected an upward trajectory recording at 5.04% owing to the incline in the global crude oil price amid geopolitical fears.
Petrol Price Trend in India in June 2018
- With petrol prices on the incline in the month of May 2018, the petrol price fell on the 1st June 2018 which stood at Rs.78.33 per litre, which is also the highest for the month.
- During the first and second week, petrol prices in India started to decline in tandem with the fall in crude oil rates.
- State-owned oil companies decided to cut fuel prices as the global crude oil rates falling nearly by 1% due to geopolitical fears of a trade war between the US and China.
- After touching a record high of $80 per barrel, crude oil rates were down to $73.50 per barrel in the global market.
- The Organisation of Petroleum Exporting Countries (OPEC) met in Vienna on 22nd June 2018 to address the concern of rising crude oil prices in the global market. They decided to increase the output moderately along with key ally Russia declaring that they will increase crude oil production as well.
- During the last week in June 2018, petrol prices in India continued on a downward trend in tandem with the global crude oil prices.
- Overall, petrol prices in India in June 2018 posted a downward trajectory at 3.55% with the fuel recording its lowest for the month on the last day at Rs.75.55 per litre.
Trend in Petrol Prices in Delhi (January 2018-March 2018)
|January 2018||February 2018||March 2018|
|Opening date price||Rs.69.97||Rs.73.05||Rs.71.57|
|Closing date price||Rs.72.92||Rs.71.51||Rs.73.55|
|Highest price||Rs.72.92 (Booked on 30 January)||Rs.73.38 (Booked on 6 February)||Rs.73.55 (Booked on March 26)|
|Lowest price||Rs.69.97 (Booked on 1 January)||Rs.71.50 (Booked on 25 February)||Rs.71.57 (Booked on 1 March)|
The data has been sourced from the official websites to construct this table. As you can see from the table, the petrol price has produced an upward trend throughout the month of January 2018. It was up 4.05% to Rs.72.92 per litre on the closing date. Since the crude oil has decreased marginally, the fuel prices was down 2.15% to Rs.71.51 per litre on the last day of February 2018.
The fuel rate stirred upwards during the first few days of the month and began sliding towards the end. It continued an upward trend in March 2018 and was up by 2.69% during the month. The highest petrol rate was registered at Rs.73.55 per litre on 26 March 2018 whereas the lowest petrol price at Rs.69.97 per litre on the beginning day of January 2018.
Trend in Petrol Prices in Mumbai (January 2018 -March 2018)
|January 2018||February 2018||March 2018|
|Opening date price||Rs.77.87||Rs.80.91||Rs.79.45|
|Closing date price||Rs.80.79||Rs.79.39||Rs.81.41|
|Highest price||Rs.80.79 (Registered on 30 January)||Rs.81.24 (Registered on 6 February)||Rs.81.41 (Registered on 31 March|
|Lowest price||Rs.77.87 (Registered on 1 January)||Rs.79.38 (Registered on 25 February)||Rs.79.45 (Registered on 1 March)|
The VAT is levied in Mumbai, the capital city of Maharashtra, at 47.94% on petrol. It is the highest among other Indian states. This is the reason why the petrol price in Mumbai is costlier. The petrol rates not only in Mumbai but also in Chennai, Delhi and Kolkata have hit their historical highs in January 2018. They have gained in January 2018 and March 2018 by 3.61% and 2.41% correspondingly.
So far this year, 2018, the fuel was priced the highest at Rs.81.41 per litre on 31 March 2018 in the city. The lowest price was registered at Rs.77.87 per litre on 1 January 2018. The fuel rate has slid by 1.19% in February 2018 since costs of crude oil were comparatively low during the month. The price is anticipated to grow further.
Trend in Petrol Prices in Bangalore (January 2018-March 2018)
|January 2018||February 2018||March 2018|
|Opening date price||Rs.71.06||Rs.74.20||Rs.72.69|
|Closing date price||Rs.74.07||Rs.72.63||Rs.74.71|
|Highest price||Rs.74.07 (Booked on 30 January)||Rs.74.54 (Registered on 6 February)||Rs.74.71 (Registered on 31 March)|
|Lowest price||Rs.71.06 (Booked on 1 January)||Rs.72.62 (Registered on 23 February)||Rs.72.69 (Booked on 1 March)|
As we can observe from the table, the petrol price in Bangalore is lower compared to Mumbai, but higher compared to Delhi. The price of the fuel tends to vary from city to city because of two reasons: 1) the VAT component and 2) the dealer’s commission. Like Delhi and Mumbai, even in Bangalore, the petrol prices were up in January 2018 and March 2018 by 4.06% and 2.70% respectively.
Between January 2018 and March 2018, in the city of Bangalore, the highest fuel price was logged at Rs.74.71 per litre on 31 March and the lowest fuel price at Rs.71.06 per litre on the opening of January 2018. The quantum of deviation is different amid these cities. For instance, in Bangalore, the percentage of fall in the petrol price in February 2018 is different from that of in Delhi and Mumbai.
Impact of GST on Oil and Natural Gas Industry
The Goods and Services Tax (GST) is a unified indirect tax platform that was implemented in July 2017.As on today, the oil and natural gas industry has been kept outside the GST regime. What would have been the impact on the industry if GST was imposed?
The cost of compliance would have doubled as the industry had to comply with the present and GST tax structures. The implementation of GST would have resulted in non-creditable tax, which means the participants of the industry had to pay GST upon the purchase of plant and machinery. They would not have been able to obtain credit on saleable products. Moreover, upstream corporations would have been adversely affected by a hike in the tax rate from 15% to 18%.
With respect to the segment of gas utilities, gas marketers would have faced complexities since they had to remit GST on transmission rates. GST excludes five petroleum derivatives - natural gas, high-speed diesel, crude oil, motor spirit and aviation turbine fuel while it covers other commodities such as kerosene, LPG, fuel oil, naphtha.
GST Impact on Petrol Prices in India
Let’s take a look at how much is taxed on petrol.
|Fuel cost (after freight, margin of OMCs, refining expenses)||Rs.27.51 a litre|
|The center’s excise duty||Rs.21.48 a litre|
|Pump dealer’s commission||Rs.2.5 a litre|
|Gross rate before Value Added Tax||Rs.51.48 a litre|
|27% VAT on gross price (Delhi)||Rs.13.9 a litre|
|Pollution cess at 25p||Rs.0.25 a litre|
|Retail price of petrol (RSP)||Rs.65.63 a litre|
32% of the retail price of petrol goes to the central government and 21.5% to the state. The central government gets Rs.21.48 and the state Rs. 14.15 if the RSP is 65.63. This is the current scenario.
What is the impact of GST on petrol prices in India? Let’s take an example of the capital city, Delhi.
A litre of petrol costs Rs.70.56 in Delhi as on 28th September 2017. It will fall to Rs.30.85 a litre when we take out Rs.21.48 paid as the excise duty a litre, the state government’s 27% VAT, Rs.3.24 remitted as commission to dealers. If GST is imposed on petrol, how much do we pay?
Here goes the calculation:
· In case 12% GST on petrol, a litre of petrol costs Rs.38.10.
· In case 18% GST on petrol, the cost of petrol per litre is Rs.40.05.
· In case 28% GST, which is the highest rate fixed till date, the cost in the city is Rs. 43.44 per litre.
Petrol prices in India would have cheaper for consumers, but the revenue source for both the governments would have been adversely affected. Let’s wait till the next turn.
It is important to understand the participants of the oil and natural gas industry to understand how petrol prices in India are determined. They include:
- Oil production and exploration corporations: These corporations are liable for producing oil in its crude form. The major participants of this segment include Crain India, Reliance Industries, Oil and Natural Gas Corporation (ONGC), Oil India. Only 25% of the country’s oil requirements is met through these companies and the rest through importing.
- Oil Marketing Corporations: Oil marketing companies, also called refineries, manage everything from the stage of crude oil till the delivery of saleable fuel to dealers. This segment consists both public and private sector companies such as Reliance Industries, Essar, Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Private Corporate.
- Dealers: Owners of petrol bunks are called dealers who can be individuals or business entities. They sell petrol to end customers after adding their margins and local taxes.
Quarterly Petrol Price Trend In India Between January 2018 And March 2018
|Opening date price||Rs.69.97 per litre||Rs.73.03 per litre||Rs.71.63 per litre|
|Closing date price||Rs.72.92 per litre||Rs.71.49 per litre||Rs.73.55 per litre|
|Highest price||Rs.72.92 per litre recorded on 31||Rs.73.36 per litre recorded on 6 & 7||Rs.73.55 per litre recorded on 31|
|Lowest price||Rs.69.97 per litre recorded on 1||Rs.71.49 per litre recorded on 27 & 28||Rs.71.63 per litre recorded on 1|
Trend In Petrol Price In India In January 2018
- On the first day of 2018, petrol price in India stood at Rs.69.97 per litre which is also the lowest price of petrol for the month. Cost of petrol in metros such as Kolkata stood at Rs.72.72 per litre, Mumbai at Rs.77.87 per litre, and Chennai at Rs.72.53 per litre.
- While the trend of petrol prices in the first week of January remained steady, they gradually increased by up to a rupee by the second week of the month ending at Rs.71.18 per litre on the 15th.
- The increase in fuel prices was attributed to the hike in the Indian Oil Basket price which stood at $67.50 per barrel on the the 10th, then moving upwards at $68.02 on the 15th.
- The average petrol price in January 2018 stood at Rs.71.45 per litre in the country and on the last day of the month petrol price stood at Rs.72.92 per litre.
- Overall, petrol price in India in January 2018 indicated an upward trend of 4.05% attributed to an increase in international crude oil price and the USD/ INR exchange ratio, which was down by 14 paise.
Trend In Petrol Price In India In February 2018
- Petrol price in India on the 1st February stood at Rs.73.03 per litre and remained steady during the first 15 days averaging Rs.73 per litre.
- The Union Budget for fiscal 2018-19 was presented by the Finance Ministry and despite being a key driver in determining the petrol price in India, there were no noticeable changes in the price of fuel in first two weeks.
- In the second half of February 2018, petrol price declined by nearly a rupee as INR gained against the USD. The lowest petrol price in India in February was recorded at Rs.71.59 per litre on the 25th.
- The trend in petrol price in India in February 2018 was on the downward recording a 2.15% decline from the opening date price to the closing date price.
- Prices of petrol in February 2018 recorded the highest as well as the lowest rate, Rs.71.49 per litre on the last day of the month, for the quarter.
Trend In Petrol Price In India In March 2018
- Petrol price in March 2018 began with Rs.71.63 per litre on the first day, which is also the lowest petrol price for the month.
- Since the value of the USD dropped against INR, the price of petrol in India increased nearly by a rupee by the 15th of the month compared to the opening date price.
- During the third week of the month, the increase in petrol price was significantly lower, but towards the end of the month, petrol price was at its highest at Rs.73.55 per litre.
- Overall, the trend of petrol price for the month witnessed an upward trend of 2.69% determined by the hike in the international crude oil prices and the appreciation of INR over the USD.
Components of Petrol Prices in India
A litre of petrol in the national capital costs you Rs.70.56 at the moment. The central excise duty is Rs.21.48 a litre as on today? Why are we paying so much then? How is the RSP computed? The computation of RSP is based a few considerations, which are:
1.Cost of crude oil plus cost and freight charges
The cost of crude oil is the biggest component of the RSP. Oil manufacturing companies pay crude oil prices in addition to the cost and freight charges to buy oil from overseas companies. India is one among the biggest importers of crude oil.
2.Refinery transfer price (RTP)
Refinery transfer price is the cost incurred by OMCs to convert crude oil into refined petrol. In other words, RTP is a fee charged by refineries to OMCs to convert oil into refined petrol.
3.OMCs profit margin
OMCs retain the possession of oil until it is refined and then they sell refined petrol to local dealers after adding a profit margin.
4.Central and state taxes
Tax on petrol is imposed by the state and the central. The central excise duty is the same across the nation while the component of VAT varies within states.
5. Dealer commission
Local dealers or petrol bunk owners sell petrol to end customers after adding their commission per litre of petrol. Dealer commission may slightly vary.
All the aforementioned components get added to the final price. The variable components of petrol prices in India are transportation costs and the state VAT.
Breakup of Petrol Prices in India
The INR has strengthened against the USD recently. The crude oil price floats around $48 at present. The cost of one barrel, which is equivalent to 159 litres, is Rs.3210 that means a litre of oil costs you Rs.20.19. Crude oil prices are also marked to market dynamics. With this information, let’s now take a closer glimpse at the breakup of petrol prices in India as on 24th August 2017.
|The cost of crude oil with freight||Rs.3,210 a barrel of 159 litres|
|The cost of crude a litre||Rs.20.19|
|OMC cost computation|
|Refinery and processing expenses||Rs.6.03 a litre|
|Freight, transportation, OMC margin||Rs.3.31 a litre|
|Fuel cost after refining||Rs.29.53 a litre (52% of RSP)|
|The central excise duty on petrol||Rs.21.48 a litre (25% of RSP)|
|Dealer price before VAT||Rs.51.01 a litre|
|Dealer retail price computation|
|Dealer commission||Rs.3.23 a litre (2% of RSP)|
|VAT 27% plus 25p pollution cess||Rs.14.64 a litre (17% of RSP)|
|Retail selling price of petrol in Delhi||Rs.68.88 a litre|
This is how the retail selling price of petrol is computed in India.
VAT on Petrol Prices in India
The following table gives you an idea about effective rates of VAT imposed on petrol by Indian states as on 1st September 2017. The data has been released by Petrol Planning and Analysis Cell (PPAC).
|State||VAT on petrol||State||VAT on petrol|
|Andhra Pradesh||38.82||Arunachal Pradesh||20.00|
|Madhya Pradesh||38.79||Jammu & Kashmir||29.53|
|Uttar Pradesh||32.45||West Bengal||26.85|
|Also Know: Diesel Price In India|
Factors Impacting Petrol Prices in India
The cost of petrol in India is impacted by the following factors:
1. Crude oil prices
The pricing of crude oil is often what impacts petrol rates the most. Crude oil, also called unrefined oil, is an international commodity. The market for which is dynamic in nature. The most common influencers of the cost of oil include:
- Demand and supply: The law of demand applies even for petrol prices, which increase when there is an increased demand for oil and decrease if there is a decreased demand.
- Future supplies and reserves: An inadequate amount of oil reserves increases the oil cost that in turn impacts fuel rates.
- Political events: Crude oil pricing is affected by wars, natural calamities, new government regulations.
- Demand from leading economies: The oil price boosts when there is a larger demand from leading economies of the world.
As discussed earlier, petrol is taxed by centrally and by the state. Petrol prices in India will change in proportion to changes in the central excise duty and the state VAT.
3. Refinery Consumption Ratio
This is a very important consideration. Crude oil when imported by OMCs is sent to refineries for further processing. A lower refinery consumption ratio leads to a lower quantity of refined petrol for sale and, thus increases the cost of petrol.
4. Currency Conversion Rate
The USD is the base currency to buy raw oil. If the USD strengthens against the INR, the buying cost of oil shall go up; when it weakens, the cost will be declined. Ups and downs in oil impact the buying cost of petrol as a result.
Determinants of Bunk Prices
1. Seasonal condition
Seasonal conditions in oil producing countries have a direct impact on extracting raw oil. Oil manufacturing companies cannot have the same productivity throughout all seasons. A drop in productivity gives a boost to the buying cost of raw oil at global markets, thereby affects petrol prices at bunks.
2. Weather reports
Weather reports differ from seasonal conditions. Crude oil once purchased by OMCs is transported to refineries. When bad weather reports interrupt transportation activities, we are left with an inadequate quantum of refined petrol for consumption.
3.Restricted refining capabilities
There exists a dearth of refined petrol when refineries limit their refining capabilities due to high running expenses. So, usable oil is short in supply, leading to a price hike at bunks.
4.Devaluation of USD
As we know, crude oil is traded in US dollars. Oil manufacturing companies tend to tweak prices if the USD weakens against the major currencies of the world.
LPG, Domestic LPG, CNG, Kerosene
- Liquified Petroleum Gas (LPG) is a composition of commercial propane and commercial butane. It can be extremely dangerous. The way it is utilised, shifted, and bottled should be paid extreme importance. LPG, under moderate pressures, can be readily liquified.
- Domestic LPG is a composition of hydrocarbons that are vaporous at usual temperature. Hydrocarbons can be stockpiled in cylinders and liquified at temperate pressure. Domestic LPG is a gas with no colors and not dangerous. The gas connection at homes should be done with utmost care.
- Compressed natural gas (CNG), a fuel, can be utilised in lieu of propone, gasoline, diesel fuel. CNG ignition foodstuffs lesser detrimental gases than other fuels. In the event of a spill, it is harmless compared to other fuels. It can be discovered above oil repositories.
- Kerosene, also called paraffin, is a combustible liquid and utilised as a fuel for power, heat, light. It is usually a multipurpose fuel and can be used effectively, carefully in order to get incredible results. Kerosene is famous among people for cost-effectiveness.
Also check Today's Petrol Price in the most popular Indian cities
|Petrol Price in Delhi||Petrol Price in Kolkata||Petrol Price in Pune||Petrol Price in Mumbai||Petrol Price in Bangalore|
|Petrol Price in Coimbatore||Petrol Price in Chennai||Petrol Price in Hyderabad||Petrol Price in Ahmedabad||Petrol Price in Gujarat|
Frequently Asked Questions on Petrol Price
1. What is the retail price of fuel?
The retail price of fuel encompasses the product’s cost, the operating expenses of the state government, excise duties, taxes, margins.
2. Who manages bunk prices in India?
In June 2010 and October 2014, the Indian government has deregulated diesel and petrol prices. Both central and state governments have no direct control over fuel prices. Now, they are market determined. The components of pump prices today are global crude prices, transportation and refinery costs, VAT, excise duty.
3. Why do fuel prices vary from one country to another?
Fuel prices vary from one country to another due to the following reasons:
- Currency variations
- Government subsidies for fuel
- Government tax rates and excise duty
- Availability of crude oil
- Market speculation
- Government regulations related to petroleum products
4. Does the US exchange rate impact fuel prices?
The world’s crude oil is traded in US dollars. Due to which, fluctuations in currency exchange rates shall definitely impact fuel prices. For instance, if the Indian rupee falls against the US dollar, the purchasing price of crude oil for India may increase.
5. Why is diesel rate lower than petrol price in India?
The agricultural sector consumes diesel. The sector employs more than 40% of Indians and accounts for 14% of gross domestic product (GDP). Diesel price is lower than petrol rate since it is subsidised by respective governments. Petrol is used for non-economic activities.
6. Why has the Indian government not imposed GST on diesel and petrol?
Diesel and petrol are major revenue sources for both state and central governments. Currently, the central excise duty is 23% and the state government VAT is 34%. If the central government had imposed GST on petrol and diesel, the government would have generated 28% tax. This is the biggest value of GST that would have affected the revenue.
7. Which are the factors affecting natural gas prices?
Natural gas prices are influenced by net imports, underground storage levels, natural gas production, economic conditions, weather, petroleum prices.
8. Why do fuel prices differ within Indian states?
Petrol rates differ within Indian states because of three vital factors: 1) tax regulations, 2) transportation expenses, 3) political health. India has different tax regulations across the states. Both central and state governments tax petroleum derivatives differently. A state with a lower tax rate has a lower price charged for petrol and diesel. Transportation expenses even impact petrol prices. The distance covered from refineries to dealers gets added. A shorter distance covered has a lower price charged compared to a longer distance. Political stability is another important consideration. A shift in rolling government may alter existing tax structures and subsidies either through a hike or through a drop.
9. How Shell petrol differs from other brands?
Well, there is no difference in terms of quality. Quantity may differ as Shell petrol price is a little more than Bharat Petroleum Petrol price, HP petrol price or Indian Oil petrol price.
*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.