Petrol Price in Kota
Kota is located in the Indian state of Rajasthan. With a close proximity to the National Capital Region, Kota is well connected by road, rail as well as by air. Within the city, the Rajasthan Roadways offer bus services to commute. Additionally, unmetered taxis and auto rickshaws offer public transportation to commuters.
Petrol prices in Kota are revised on a daily basis similar to other cities in the country. The daily revision of petrol prices is known as the ‘Dynamic Fuel Pricing’ mechanism. Under this mechanism, State-owned oil marketing companies update petrol prices based on the global crude oil rate and the currency exchange value of the preceding day.
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There are several factors which influence the petrol price in Kota. These factors are considered before oil companies arrive at the Retail Selling Price (RSP) of petrol in a city. Oil companies including Indian Oil, Bharat Petroleum and Hindustan Petroleum operate more than 90% of fuel stations across the country and fix fuel prices at different cities. Let’s analyse each of these factors which influence the change in petrol prices, understand the computation of the petrol price in Kota and methods to track the current petrol price in Kota.
Factors Which Influence the Petrol Price in Kota
India purchases more than 70% of crude or unrefined oil from oil-producing countries which are then refined and supplied across the country by Oil Marketing Companies (OMCs). Since most of the crude oil comes from other countries, petrol has become an expensive and essential commodity in India. While the crude oil price and the currency exchange rate are external in nature, internal factors include taxes, profit margin and operational costs of oil companies, operational cost, and commission to dealers.
- Global Crude Oil Rate: Crude oil is sold in barrels and is supplied by the Organisation of Petroleum Exporting Countries (OPEC). The rate of crude oil is dynamic in nature which is influenced by various elements such as the output of crude oil, shortage in supply, geopolitical fears or higher demand. When crude oil rates increase, the petrol price in Kota and other cities is revised in tandem with the change and vice versa. The global crude oil price is the primary component while pricing petrol in a city.
- Currency Exchange Rate: Crude oil is typically traded in US dollars, any fluctuations in the dollar value over the Indian rupee affects the cost to purchase oil in the international market. If the US dollar appreciates over rupee, the petrol price increases accordingly and vice versa.
- Tax on Petrol: The supply of petrol in India attracts two types of taxes. While the Centre levies the excise duty, the respective State imposes a local sales tax or Value Added Tax (VAT). The excise duty is uniform across the country which is currently charged at Rs.19.48 per litre, while the state of Rajasthan charges VAT at 30.87% per litre. Any revision in the tax rate on the supply of fuel impacts the current petrol price in Kota. Taxes form the biggest component in the computation of the petrol price in Kota.
- Profit Margin & Commission to Dealers: Oil companies purchase and transport crude oil from oil-producing countries which are then refined and sold as petrol in the country. These fuel companies include their profit margin, operational cost and the commission to dealers (fuel station owners) before fixing the final price of petrol in a city. Whenever there’s a revision in these costs, the petrol price in Kota is affected.
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What is Dynamic Fuel Pricing Mechanism?
As mentioned, fuel prices are revised on a daily basis. Fuel companies include the preceding day’s crude oil rate and the exchange rate of the US dollar to arrive at the final selling price of petrol. Under this method, both oil companies and consumers benefit from any fluctuations in the crude oil rate. If there’s a reduction in the crude oil rate, the benefit is immediately passed on to the customers, likewise, if the rate of crude oil increases, oil companies pass on the increase thereby not incurring losses.
Prior to the ‘Dynamic Fuel Pricing’ mechanism, fuel companies used to revise fuel prices in Kota every fortnight. The average rate of the preceding fortnight’s crude oil price and the currency exchange value is included in the petrol price. However, under this method oil companies incurred losses as they had to wait a fortnight to pass on any increase in the crude oil price to the customer. Also, consumers could take advantage of any drop in crude oil price as they had to wait a fortnight to benefit from a lower petrol price. Hence, the fortnightly method was stopped and the dynamic fuel pricing mechanism was introduced.
How to find the Current Petrol Price in Kota?
Since petrol prices are revised on daily basis, it could be a challenge in tracking the current petrol price in Kota. To find the most recent petrol price in Kota or other cities oil companies have introduced several methods to find the current petrol price.
- Mobile Apps: With smartphone usage on the rise, oil companies have launched mobile apps to track today’s petrol price in Kota. While Indian Oil has launched the ‘Fuel@IOC’ app, Bharat Petroleum offers services through ‘SmartDrive’ app and Hindustan Petroleum has introduced the ‘MY HPCL’ app to find the latest fuel price in a city.
SMS Services: For customers looking to utilise the SMS service, the process below will retrieve the petrol price in a particular city.
- Bharat Petroleum: SMS RSP Dealer Code to 9223112222.
- Indian Oil: SMS RSP Dealer Code to 9224992249.
- Hindustan Petroleum: SMS HPPRICE Dealer Code to 9222201122.
- Online Portal: Fuel companies update their respective website with the current petrol price in Kota as well as other cities in the country.
Computation of the Petrol Price in Kota
Now that we understand the concept of the ‘Dynamic Fuel Pricing’ mechanism and the factors which influence the change, let’s break down each component which fuel companies use to calculate to petrol price in Kota as well as other cities. Below is the petrol price in Kota recorded on 3 June 2018.
|1||Crude Oil Price + Freight Charges||$78.30 per barrel = Rs.32.98/Litre (considering $1=66.96 and 1 barrel oil = 159 litres)|
|2||Oil Companies’ Profit margin, transportation, refining, and other operational costs||Rs.8.10/Ltr|
|3||Centre’s Excise Duty + Road Cess||Rs.19.48/Ltr|
|4||Commission to dealers||Rs.2.53/Ltr|
|5||State’s Value Added Tax (VAT) + 25p Pollution Cess with surcharge||Rs.19.73/Ltr|
|Total||Retail selling price of petrol in Kota||Rs.82.82/Ltr|
Is GST Applicable on Petrol in Kota?
India moved to a single taxation regime known as the Goods and Service Tax (GST). All goods and services rendered in India attract the GST; however, petroleum products such as petrol and diesel have been exempted from the GST. Petrol and diesel continue to attract the Centre’s excise duty and the State’s VAT. The supply of petrol and diesel bring huge revenue to the government. By bringing petrol under the GST, the revenue would be impacted as the highest tax slab in GST is 28%, which is lower than the current rate of taxes on fuel. Therefore, GST is not applicable to petrol in Kota currently. That said, if petrol is brought under the current system of GST, the cost to purchase petrol will reduce significantly.
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*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.