Petrol Price in Jabalpur
Petrol price in Jabalpur, a metropolitan city in the Indian state of Madhya Pradesh, is always on a higher side compared to other Indian states. The higher taxes collected by the state government on the sale of petrol is one of the components that is making petrol price dearer in the city.
For a common man, the metrics of petrol pricing are difficult to understand. However, a detailed look at the major components would give a better idea about how petrol is priced in Jabalpur and why it varies on a daily basis.
Discussed below is all such information one needs to know about petrol pricing in Jabalpur.
Factors Affecting Petrol Rate in Jabalpur
Various domestic and international elements influence petrol price in Jabalpur, just like in other Indian cities. Domestic factors that affect petrol price in the city are central and state government taxes, logistic charges, profit margins of oil companies and dealer’s commission. International factors that influence petrol rate on a daily basis include the price of Indian crude basket and rupee to dollar exchange rate.
Unlike international factors, domestic factors do not show much effect on petrol price on a day-to-day basis. As and when there is a revision in the aforementioned components, petrol rate will get affected.
- Price of Indian crude basket: Indian crude basket is the price at which Indian oil companies purchase fuel from oil producing countries. As India imports over 70% of its crude oil requirements from other countries. Price of Indian crude basket plays a key role in petrol pricing. Moreover, with the implementation of dynamic fuel pricing mechanism, petrol prices in Jabalpur are being aligned with crude oil prices in the global market on a daily basis.
Today’s petrol price in Jabalpur will be calculated based on yesterday’s Indian crude basket price.
- Currency exchange rate: Oil trading typically happens in US dollars. Even India purchases crude oil in US dollars then converts the dollars to rupees for petrol price computation. Thus the fluctuating nature of dollar shows some impact on petrol prices on a daily basis. Whenever the rupee strengthens, petrol price decreases and vice versa.
- Central government taxes: The excise duty levied by the central government on petrol is one of the major factors that affect petrol price in Jabalpur at domestic level. Currently, the excise duty levied on petrol is Rs.19.48 per litre. The rate remains the same across all Indian states. The previous revision of excise duty on petrol was announced in February 2018 when the tax was reduced by Rs.2 per litre of petrol.
- State tax on petrol: Each state government in the country levies a different value added tax (VAT) on petrol. The rates are decided by respective state governments and are levied as a percentage on petrol price per litre.
With regards to Jabalpur, Madhya Pradesh state government currently levies 36.22% VAT on every litre of petrol sold in the state.
- Profit margins of oil companies: The profit margins of Indian oil marketing companies (OMCs), which incur the refining and transportation costs of crude oil, is another component of petrol pricing. However, they do not affect the prices on a regular basis.
The three state-owned oil companies in India, including Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum, occupy 90% of Indian oil market share. They purchase crude oil from other countries and refine it to extract petrol. They thus add refining, transportation and marketing costs to the cost price of crude oil before selling it to petrol dealers.
- Petrol dealer’s commission: Petrol station dealers purchase refined petrol from the OMCs and bring it to their respective stations. They thus add fuel transportation charges, station maintenance costs, etc., to the cost price of petrol before selling it to the end consumers. The oil companies typically decide dealer’s margin and revise the same once every year.
Breakdown of Petrol Price in Jabalpur, Madhya Pradesh
Using the factors listed above, let’s see how the petrol rate in Jabalpur on 2nd May 2018 was calculated.
|1||International crude oil price along with ocean freight charges||$80.56 per barrel = Rs.33.51/Litre (considering $1=66.14 and 1 barrel oil = 159 litres)|
|2||Oil company’s margin, transportation, refining and freight cost||Rs.2.17/Ltr|
|5||Value added tax (VAT)||Rs.21.56/Ltr|
|Total||Retail selling price of petrol at Jabalpur||Rs.80.32/Ltr|
Frequently Asked Questions (FAQs) on Petrol Price in Jabalpur
- Why does petrol price in Jabalpur change on a daily basis?
- Why are petrol prices in Jabalpur higher compared to other Indian cities?
- Where do I find the cheapest petrol in Jabalpur?
Petrol price in Jabalpur changes on a daily basis due to the dynamic fuel pricing mechanism. The pricing model revises the petrol price across the country based on previous day’s international crude oil price and currency exchange rate. The revised priced will be updated at all the petrol stations in Jabalpur by 6 a.m. every day.
An important factor that affects petrol price is the value-added tax (VAT) levied by state governments. Since Madhya Pradesh government levies the second highest tax rate in the country, Petrol prices in Jabalpur are higher in the city compared to other cities.
Petrol price across the city of Jabalpur remains the same with just minute differences. However, the state-owned fuel pumps including Indian Oil, Hindustan Petroleum, and Bharat Petroleum offer best petrol price in Jabalpur compared to private counterparts like Essar and Shell. Indian Oil offers the cheapest petrol in Jabalpur.
*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.