Petrol Price in Ludhiana
Petrol retailed at Rs.83.68 per litre on 04 June 2018 in Ludhiana, an industrial city in Punjab. In a majority of Indian cities, during the first week of June 2018, petrol was sold at a price of more than Rs.80 per litre. It is an unusual price, which is troubling commoners. According to official sources, the Central Government is trying its best to reduce the fuel price and has been compelled by opposition leaders to do so. Fuel consumers across the city of Ludhiana are expecting a quick reaction from concerned officials.
How have Petrol Prices moved in Ludhiana?
On 01 January 2018, petrol rate in Ludhiana stood at Rs.75.31 per litre. The fuel rate soared to Rs.83.93 per litre on 31 May 2018. Over the last five months, fuel companies have declared a price rise of Rs.8.60 per litre, which is massive. In January 2018, March 2018, April 2018 and May 2018, petrol rates in the city were increased by Rs.2.94 per litre, 1.84 per litre, 0.84 per litre and Rs.3.60 per litre respectively. Owing to downfalls in crude oil rates, fuel rates were lowered by Rs.1.59 per litre in February 2018. For the last five months, the highest fuel price stood at Rs.84.01 per litre on 29 May 2018.
A Glimpse at Fuel Companies
Petrol is sold by fuel companies that are three in number: 1) Indian Oil Corporation Limited, 2) Hindustan Petroleum Corporation Limited and 3) Bharat Petroleum Corporation Limited. They are publicly-owned and operate throughout India. All types of petroleum products are produced and marketed by these premier fuel brands. For selling widely used fuels such as petrol and diesel, each fuel company has a big network of suppliers. In Ludhiana also, petrol is majorly sold by HPCL, BPCL and IOCL through a grid of supply stations.
System for Fuel Price Revision in Ludhiana
Currently, BPCL, HPCL and IOCL have been revising the rate of petrol under a new system called ‘dynamic fuel pricing.’ Marketers will consider certain parameters to determine the price of a particular thing that affect its value. For instance, a mobile phone company will price its newly launched mobile phone considering various aspects such as demand and features of the phone. Similarly, under dynamic fuel pricing, the price of petrol per litre is revised regularly taking into account the USD/INR exchange rate and crude oil overheads. As a result, customers experience a new fuel price every day in the city of Ludhiana.
Why Dynamic Fuel Pricing?
Dynamic fuel pricing is currently in use in several countries, including India, Australia and Japan. As a global practice, it provides remarkable benefits to all parties involved in the fuel sector. The introduction of dynamic fuel pricing in India has enabled fuel entities to effortlessly manage their working capital and cash budget. Working capital is defined as a net difference between liquid assets and current obligations. Have you faced the stock-related issues in Ludhiana since June 2017? The answer should be ‘NO.’ Since there cannot be big lapses in fuel prices under this system, petrol and diesel are supplied uninterruptedly in all Indian cities, including Ludhiana. This is the largest benefit for a petrol user.
Tracing Today’s Petrol Price in Ludhiana is no Longer a Problem in Ludhiana
Start using mobile applications in order to get the price in your city. Within a short span, mobile applications offered by HPCL, BPCL and IOCL have gained popularity amid fuel consumers. Do you want to get the latest fuel price fixed at HPCL? If yes, make sure you download and use My HPCL, a mobile application crafted by HPCL. Customers of BPCL and IOCL may consider using SmarDrive and Fuel@IOC. SmartDrive, a mobile application, is offered by BPCL. Similarly, Fuel@IOC, a mobile application, is provided by India Oil. You can also keep a track of previous transactions you have made at fuel stations.
Computation of Petrol Price in Ludhiana
As we know, fuel companies will require crude oil to extract petrol. India does not have sufficient resources to extract crude oil, which ought to be imported from other countries. Usually, crude oil is borrowed on a contractual basis by Indian fuel entities. The price of unrefined oil is decided on the crude oil market and is subject to change. On 31 May 2018, the price of WTI crude oil per barrel was $67.04. One barrel is equal to 159 litres.
The imported unrefined oil is sent to refinery centers maintained by fuel companies for further processing. Fuel companies will have to spend landing costs, operational costs, entry expenses, RTP, etc. These are called OMC expenses. Once petrol is extracted, excise duty is imposed. Excise duty is a central tax, which was Rs.19.48 per litre when revised recently in February 2018. Value-added Tax (VAT) is further executed by the concerned state government. In our context, it is the State Government of Punjab, which had levied VAT on petrol at 35.40% as on 01 April 2018. OMCs will set the selling price of petrol in Ludhiana by adding the foregoing cost aspects. To make it simpler for you:
Current petrol price in Ludhiana = crude oil expenses + excise duty + VAT + commission for dealers
Forces Affecting Fuel Prices in Ludhiana
Fuel rates in Ludhiana will get affected by crude oil costs, taxes, production cuts, the supply and demand pattern, the INR/USD exchange rate, political trends in oil-producing nations, etc. Under dynamic fuel pricing, both the exchange rate and the price of unrefined oil have a significant impact on petrol price in Ludhiana. The higher the crude oil cost, the higher shall be the fuel price and vice versa. The higher the excise duty and the VAT, the higher shall be the fuel price and vice versa.
GST vs Fuel Industry in India
Till date, five petroleum products have been outside the realm of GST. So, GST does not have any effect on petrol price in Ludhiana. The rollout of GST on petrol will decrease the RSP of petrol, which in turn negatively affect the revenues of the Central Government.
Also Check Petrol Price in NearBy Cities of Ludhiana
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