Petrol Prices in Kerala
Kerala has witnessed 20% hike in the monthly utilisation of petroleum products. One of the main reasons behind the increased consumption is load-shedding. Many people are using power generators, which consume petroleum fuel.
What is the Mechanism used to Determine the Cost of Petrol in Kerala?
The daily revision is currently in practice throughout the state since 16 June 2017. The daily revision is also called ‘dynamic fuel pricing.’ Before 16 June 2017, fuel rates in Kerala used to be revised twice a month, which is on the sixteenth and first of every month. The fortnightly-based revision was used by all state-run oil marketing companies for the last 15 years.
The daily revision plays a significant role in transmitting the volatility of the exchange rate and worldwide crude oil prices instantly to petrol customers. The exchange rate and the price of crude oil are highly volatile in nature. They tend to change regularly. Since the petrol price is revised on a daily basis under the new system, market-determined prices can be immediately shifted to consumers. This is the biggest advantage of dynamic fuel pricing.
The daily revision has been in practice in developed economies such as the United State of America (USA) and Australia. The Government of India has adopted the new system in order to bring transparency in fuel pricing and encourage the best inventory management practices. Petrol prices in Kerala once revised at 06:00 a.m. every day will be made available to customers.
Trends in Petrol Prices in Kerala
Let’s consider the three major cities of Kerala for analyzing trends. In Trivandrum, the average price of petrol was Rs.72.18 between 10 October 2017 and 16 October 2017. In Kozhikode, between 10 October 2017 and 16 October 2017, the average rate of petrol was Rs.72.11. For the same period, the average cost of petrol in Kottayam was Rs.72.14. The average price was almost the same across the three major cities in Kerala.
Petrol Prices in Kerala and other States
Between 10 October 2017 and 16 October 2017, the average price of petrol in Kerala was Rs.72.14, which was the consolidated average of the three major cities the state. The average cost of petrol in Karnataka for the same tenure was Rs.69.46. In Maharashtra, it was Rs.75.92. The petrol rate in Mumbai was high compared to other states.
Quarterly Petrol Price Trend in Kerala Between October and December 2018
|Opening date price||Rs.87.20 a litre||Rs.82.71 a litre||Rs.75.84 a litre|
|Closing date price||Rs.82.89 a litre||Rs.76.20 a litre||Rs.71.98 a litre|
|Highest price||Rs.87.45 a litre booked on the 4 October 2018||Rs.82.71 a litre booked on the 1 November 2018||Rs.75.84 a litre booked on the 1 December 2018|
|Lowest Price||Rs.82.89 a litre booked on the 30 and 31 October 2018||Rs.76.20 a litre booked on the 30 November 2018||Rs.71.98 a litre booked on the 31 December 2018|
Petrol Price Trend in Kerala Between October and December 2018
- Fuel prices in India are based on the 14-day average rate of crude oil in the international market and the exchange rate of the rupee over the US dollar.
- Rates are revised daily by State-run oil companies in India and are updated at 6:00 am every day. On 1 October, the petrol price in Kerala stood at Rs.87.20 per litre.
- Petrol prices were on record highs due to the rising crude oil prices in the market triggered by the trade war between the US and China as well as after the US pulled of the Iran nuclear deal.
- Prices touched the highest for the month when a litre was sold at Rs.87.45 per litre on 4 October prompting the Centre to cut excise duty of Rs.1.50 per litre and asked oil firms to further subsidise Rs.1 per litre.
- By the end of the month, petrol prices in Kerala declined to Rs.82.89 per litre on 30 and 31 October, dropping by 4.95% over the opening price of the month.
- On 1 November, the petrol rate in Kerala stood at Rs.82.71 per litre – the highest price recorded for the month.
- There was a marginal decline in oil prices in the global market which prompted oil firms to pass on the reduction to consumers.
- On 30 October, the lowest petrol price in Kerala was recorded for the month when a litre was available at Rs.76.20 per litre.
- Overall, the petrol price trend in Kerala for the month declined significantly by 7.87% influenced by the drop in crude oil prices and a slight appreciation of the Indian currency over the US dollar.
- In December, petrol was priced Rs.75.84 per litre on the first day of the month. This was also the highest price registered during the month.
- With the geopolitical tension on the decline, the global crude oil price dropped significantly from $80 per barrel early October to $56 per barrel late December.
- This prompted petrol prices in Kerala to drop to Rs.71.98 per litre on 31 December – the lowest rate recorded during the month.
- The petrol price trend in Kerala in December fell by 5.09% mainly attributed to the massive decline in crude oil price coupled with the appreciation of the rupee over the US dollar.
Quarterly Petrol Price Trend in Kerala between July and September 2018
|Opening date price||Rs.78.39 a litre||Rs.79.23 a litre||Rs.82.14 a litre|
|Closing date price||Rs.79.52 a litre||Rs.81.85 a litre||Rs.87.05 a litre|
|Highest price||Rs.80.16 a litre recorded on the 14th||Rs.81.85 a litre recorded on the 31st||Rs.87.05 a litre recorded on the 30th|
|Lowest Price||Rs.78.39 a litre recorded on the 1st||Rs.79.23 a litre recorded on the 1st||Rs.82.14 a litre recorded on the 1st|
Petrol Price Trend in Kerala in July 2018
- Petrol prices in India are revised on a daily basis under the dynamic fuel pricing mechanism, which is updated by State-run oil companies.
- Oil companies base the global crude oil price and the exchange rate of rupee over the U.S. dollar, making both these factors significant in fixing the retail selling price of petrol in Kerala as well as other states.
- On the 1st of July, the petrol price in Thiruvananthapuram - the capital of Kerala - stood at Rs.78.39 per litre, the lowest price for the month.
- Petrol prices during the first week rose to touch Rs.78.81 per litre but dropped to Rs.78.53 by the 6th, post which it continued to incline to touch the highest price of Rs.80.16 per litre on the 14th.
- After touching a high, petrol prices declined over the course of third and fourth weeks and by the end of the month, a litre of petrol in Kerala stood at Rs.79.30.
- In the month of July, petrol prices witnessed an upward trend of 1.42% influenced by the fluctuations in the global crude oil price and the exchange rate of rupee over the U.S. dollar.
Petrol Price Trend in Kerala in August 2018
- Oil companies cut the petrol price in Kerala by 7 paise on the 1st of August as a litre of petrol was sold at Rs.79.23 as per the dynamic fuel pricing mechanism - the lowest petrol price in August in Kerala.
- Petrol prices during the first and second week continued to rise with no respite to consumers as the global crude oil price moved upwards.
- Despite the significant rise in petrol prices in the country, there was no cut in taxes either from the State or the Centre and oil companies continued to absorb any decline in oil prices instead of passing it on to consumers.
- The upward trend was witnessed during third and fourth weeks as well with petrol prices touching record highs.
- By the end of the month, the highest petrol price in August was recorded at Rs.81.85 per litre on the 31st of the month.
- Overall, petrol prices in Kerala during the month rose by 3.20% compared to the opening price of the month. The rise in prices is attributed to the increase in oil prices in the international market due to geopolitical tensions.
Petrol Price Trend in Kerala in September 2018
- A litre of petrol in Kerala on the 1st of September stood at Rs.82.14, up by 39 paise over the previous day’s price, this was also the lowest price for the month.
- The geopolitical tensions of a possible trade war between the U.S. and China led the oil price to rise significantly in September.
- Per barrel of crude oil was trading in bourses at $80 - a four-year high, which prompted petrol prices in Kerala and other states to incline considerably.
- Along with the rise in crude oil prices, the rupee declined to its all-time low with the exchange rate touching Rs.72 against the dollar.
- Petrol prices continued to breach new records with relentless hikes by oil companies across the country.
- Except for certain states such as Rajasthan, Karnataka, West Bengal and Andhra Pradesh, no other states nor the Central government reduced any form of taxes which kept petrol prices on record highs.
- The highest petrol price recorded for the month stood at Rs.87.05 per litre, up by nearly Rs.4 per litre when compared to the opening price of the month.
- Petrol price trend in Kerala in September was upward and grew significantly by 5.64% impacted by high crude oil prices and the fall in exchange rate of the rupee.
Quarterly Petrol Price Trend in Kerala Between April and June 2018
|Opening date price||Rs.77.67 per litre||Rs.78.61 per litre||Rs.81.48 per litre|
|Closing date price||Rs.78.61 per litre||Rs.82.58 per litre||Rs.78.63 per litre|
|Highest price||Rs.78.65 per litre recorded on 24th||Rs.82.66 per litre recorded on 29th||Rs.81.48 per litre recorded on 1st|
|Lowest price||Rs.77.67 per litre recorded on 1st||Rs.78.61 per litre recorded from 1st to 11th||Rs.78.63 per litre recorded from 27th to 30th|
Petrol Price Trend in Kerala in April 2018
- On the 1st of the month, the petrol price in Thiruvananthapuram, the capital city of Kerala, stood at Rs.77.67 per litre. Fuel prices in Kerala and other states in India are revised on a daily basis under the ‘Dynamic Fuel Pricing’ mechanism. This price is also the lowest recorded cost of petrol in Kerala for the month.
- Petrol prices in Kerala for the next two weeks rose marginally by as much as 29 paise per litre compared to the opening date price. Fuel prices are revised according to the global crude oil prices by state-run oil marketing companies (OMCs).
- The slight increase in petrol price is attributed to the marginal increase in the international crude oil prices.
- By the end of the month, petrol prices increased by as much as 1.21% compared to the opening price of petrol in the state of Kerala.
- The incline in petrol prices is largely attributed to the increase in the crude oil prices which is sold in barrels in the global market.
Petrol Price Trend in Kerala in May 2018
- OMCs didn’t revise the petrol price in Kerala till the 11th of the month due to the 2018 Karnataka Assembly Election which was held on the 11th.
- The petrol price in Kerala on the 1st stood at Rs.78.61 per litre which continued till the 11th similar to other cities in the country. This was also the lowest petrol price in the state for the month.
- With the Karnataka State Assembly concluded, fuel companies began the exercise of revising petrol prices across the country.
- Petrol prices in Kerala and across the country started increasing sharply as the global crude oil price touched $80 per barrel which led to the higher price of the fuel.
- On 29th May 2018, the petrol price in Kerala touched an all-time high of Rs.82.66 per litre much to the dismay of consumers across the country.
- The rise on global crude oil rates is attributed to geopolitical fears as the US administration decided to pull out of the nuclear deal with Iran. With the backdrop of a possible shortage in supply of crude oil from Iran, the cost of crude oil rose sharply.
- Petrol prices in Kerala during the month reflected a rise of 5.05% overall mainly impacted by the rise in the price of crude oil in the international market.
Petrol Price Trend in Kerala in June 2018
- After touching an all-time high, the petrol price in Kerala in the 1st declined slightly with the price of crude oil relenting much to the relief of customers.
- During the first few days, petrol prices in Kerala remained steady with the prices falling below Rs.80 mark on the 11th.
- Crude oil rates fell by 1% and oil companies began reducing the petrol price in cities across the country including Kerala.
- From a high of $80 per barrel, oil prices began to decline to post $73.50 during the second week of the month.
- The Organisation of Petroleum Exporting Countries (OPEC) met on 22 June 2018 to decide on the future course of action against the sharp incline in crude oil rates. The OPEC along with its key ally Russia agreed to increase the output slightly to address the concern of the rising fuel prices.
- With the global crude oil price on the decline, the petrol price trend in Kerala reflected a downward trajectory at 3.50%. The decline in petrol prices is largely due to the fall in the global crude oil prices as the OPEC decided to increase the output marginally.
Trend in Petrol Price in Kerala between January 2018 and March 2018
|Opening date price||Rs.73.77 a litre||Rs.76.97 a litre||Rs.75.43 a litre|
|Closing date price||Rs.76.83 a litre||Rs.75.37 a litre||Rs.77.49 a litre|
|Highest price||Rs.76.83 a litre booked on 30||Rs.77.31 a litre booked on 6||Rs.77.49 a litre booked on 29|
|Lowest price||Rs.73.77 a litre booked on 1||Rs.75.36 a litre booked on 5||Rs.75.43 a litre booked on 1|
|% Change||3.98% up||2.12% down||2.66% up|
Trend in Petrol Price in Kerala in January 2018
- The fuel prices in all parts of Kerala have broken their historical highs, including its capital city at the beginning of the month. HPCL, BPCL and IOC have declared an average fuel price of Rs.73.77 a litre on 01 in tandem with the overseas influencers.
- Globally, crude oil gained demand and thus, oil-producing countries have slightly accelerated the price of WTI and Brent Crude oil.
- As a result, the fuel prices have been on a rise steadily during the third week and the fourth week. They have accelerated to Rs.74.9 a litre on 14 and Rs.75.96 a litre on 21. The growth rate was 1.41%.
- The fuel companies extended to enhance the rates under dynamic fuel pricing during the last week in sync the price influencers.
- On 22,23,24,25,26,27,28, at IOC, petrol was valued at Rs.76.12 a litre, Rs.76.27 a litre, Rs.76.32 a litre, Rs.76.39 a litre, Rs.76.53 a litre, Rs.76.63 a litre and Rs.76.68 a litre respectively.
- The fuel climbed to its highest price at Rs.76.83 a litre on 30 and 31. This month the crude oil rate was up in excess of $5 per barrel. However, the fuel has gained its price 3.98%.
Trend in Petrol Price in Kerala in February 2018
- Oil exporting countries have experienced a steady growth in the demand for unrefined oil during the first 5-7 days. They have not reduced the price.
- In the end, the OMCs have begun increasing the RSP of petrol. Thus, the highest rate was offered on 06 at Rs.77.31 a litre.
- Over the next 15 days, the crude oil’s cost was down almost Rs.1 per barrel. Therefore, fuel prices dropped to Rs.70 per litre on 15.
- Even though the Union Budget was proposed this month, the whole oil and natural gas industry was left unaffected.
- The falling trend continued even during the third week. The closing price of the week was Rs.68.98 a litre, which is inclusive of excise duty and VAT.
- The closing date price was Rs.75.37 a litre and was down 2.12% compared to the opening date price.
- In this month, no other factors have impacted the fuel rate except the crude oil price of Indian Basket, which declined to $63.54 a barrel.
- To some extent, a reasonable hike in the USD value has impacted the fall in the fuel price in all cities of Kerala. On 1, the USD/INR was Rs.63.95 and increased to Rs.65.22 on 28. There is a major change that should be accounted for.
Trend in Petrol Price in Kerala in March 2018
- The petrol price as on the opening date was up 06 paise to Rs.75.43 a litre. On 2, it reached to Rs.75.62 a litre and was revised at Rs.75.88 a litre on 3.
- The USD/INR currency conversion ratio depreciated 0.29% on 5, 0.19% on 6 and 0.04% on 7. Unrefined oil gained its price to $62.83 a barrel.
- Therefore, the OMCs have enhanced the petrol rate on 2, 3,4,5,6 and 7 continually. The fuel was offered at Rs.76.28 a litre at OIC. The same offer even made by HPCL and BPCL at the end of the week 1.
- On 14, the fuel was retailed at a price of Rs.76.37 a litre, which was up 09 paise compared to the price recorded on 7.
- The crude oil’s demand was stable until the completion of the month, which registered the unrefined oil price of $63.80 a barrel.
- The variations in the cost price crude oil should only be accounted for a price upsurge of 2.66% and pushed the petrol price to Rs.77.49 a litre on the second last day.
Note: Crude oil can be of two categories, which include 1) Brent Crude Oil and 2) WTC Crude Oil. In India, the Central Government takes into account the combined price of these two forms to make the required changes.
Computation of Petrol Prices in Kerala
Petrol rates in Kerala are assessed in the following steps:
Step 1: Calculation of the Crude Oil Price
Overseas oil-producing companies sell unrefined oil to Indian oil marketing companies (OMCs) at benchmark rates. The present price of a barrel, which is equivalent to 159 litres, of crude oil is $49 in global markets. Therefore, the cost of a litre of crude oil is computed by converting US dollars into Indian rupees and then divided by 159. The cost of crude oil also includes freight charges paid by oil marketing companies.
Step 2: Calculation of Refinery Expenses
Upon importing crude oil from overseas oil companies, Indian oil marketing companies will shift crude oil to refineries for further processing. Crude oil is then clustered into several products such as diesel, coal tar, and petrol in distillation towers of these refineries. The cost that is incurred to convert crude oil into petrol is called refinery cost, which is added to the cost of crude oil. Moreover, crude custom levies and charges from ports to refineries are added.
Step 3: Other Cost Elements
Clustered petrol is now ready to be stockpiled in the stowage reservoirs of oil marketing companies. The actual rate of petrol, which is paid by end consumers, consists of all the aforementioned costs plus the commission charged by dealers, excise duty, value added tax (VAT), and total duties. In other words, the petrol price is the cost price that consists refining, procuring, marketing, the excise duty, and state taxes.
Factors affecting Petrol Prices in Kerala
The following factors affect petrol prices in Kerala:
- Cost of Crude Oil
- Exchange Rate
- Excise Duty and VAT
The cost of crude oil influences the retail selling price of petrol. If it increases, the retail selling price will increase; if it decreases, the retail selling price will decrease. The cost of crude oil is influenced by many factors such as seasonal variations, weather reports, overseas demands and supplies, the capabilities of refineries, and political stability or instability in oil-producing countries.
The exchange rate of the Indian currency to the base currency also has a direct impact on the cost of crude oil. For example, if the INR falls against the USD, the buying cost of crude oil in Indian rupees will rise. Similarly, if the USD falls against the INR, the cost of crude oil in Indian rupees will decrease.
Petrol is taxed by the central and state governments. The cost price of petrol will increase if the percentage of tax imposed by both the governments increase. Similarly, the cost price of petrol will fall when the percentage of tax levied by both the governments decrease. On 4 October 2017, the central excise duty was reduced by Rs.2 by the central government. After the revision, the petrol rate in Kerala was reduced to Rs.72 from Rs.74.
Impact of GST on Petrol Rates in Kerala
The Goods and Services Tax (GST) was implemented in India in July 2017. It is the biggest tax reform since independence. Under the regime of GST, all classes of goods and services are taxed primarily under four slabs: 5%, 12%, 18%, and 28%. Petroleum products such as jet fuel, diesel, natural gas, and petrol have not been included in the regime of GST. So, GST does not impact fuel rates in Kerala including petrol and diesel. If GST is levied on petrol even at the highest rate of 28%, the tax outgo will be lesser.
Also Check Petrol Price in NearBy Cities of Kerala
|Petrol Price in Trivandrum||Petrol Price in Malappuram||Petrol Price in Kozhikode|
|Petrol Price in Thrissur||Petrol Price in Kannur|
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