Petrol Price in Nanded
Petrol price in Nanded, a city in Maharashtra, changes on a daily basis due to dynamic fuel pricing mechanism being implemented by Indian oil marketing companies. Prior to dynamic fuel pricing, petrol prices in Nanded used to get revised once in every 15 days by considering the average crude oil price in the past 14 days. However, the fortnightly revision resulted in sharp rise or decline in petrol prices that created havoc among the end users.
To prevent such a situation, the Indian government instructed oil companies to implement dynamic fuel pricing mechanism, which is a popular fuel pricing mechanism in most of the developed countries. The new pricing mechanism aligns domestic crude oil prices to international crude oil prices and hence passes even the slightest change in international crude oil prices to end consumers.
|Also Know: Petrol Price in Maharashtra|
Besides international crude oil prices, there are other elements that are involved in computing petrol price in Nanded. Continue reading to get a better understanding of how petrol is priced in the city and various factors that affect petrol rate in Nanded on a daily basis.
How are Petrol Prices Computed in Nanded?
The process of calculating petrol price in Nanded, just like in other Indian cities, is not that easy. The Indian oil marketing companies also called as OMCs, play a key role in calculating petrol prices in India. They initially purchase unrefined oil from other countries, which have rich oil reserves, and pay them in US dollars. The price at which OMCs purchase oil from oil-exporting countries is known as the cost of crude oil. Crude oil is typically sold in barrels, each barrel is equivalent to 159 litres. Hence the price of one barrel of oil will be divided by 159 to get cost of one litre of oil.
After purchasing oil, the OMCs will transport the oil to Indian ports and from there to the oil refineries to extract petrol, diesel, and other fuel products. While transporting crude oil from other countries till it is refined, the companies incur a lot of expenses including entry taxes, ocean freight charges, landing and administrative overheads, refining costs, profit margins, etc. All the expenses are added to the cost of crude oil to arrive at the cost of the fuel after refining. The oil companies then add excise duty, which is the tax collected by the central government on every litre of petrol sold in the country, before selling it to the petrol dealers.
Petrol dealers purchase refined petrol from the OMCs and transport it to the respective petrol stations. They hence add oil transportation costs, petrol station maintenance costs, profit margins, etc., in the form of dealer’s commission. Finally, value-added tax, which is the service tax collected by respective state governments will be added to the price to get the retail selling price of petrol in Nanded.
Central and State Taxes on Petrol in Nanded
As discussed earlier, while the central government collects excise duty on petrol, the respective state governments levy value added tax on petrol. Currently, the excise duty on petrol is Rs.19.48 per litre, while the VAT levied by Maharashtra government is 38.93% per litre. As Nanded is a city in the state, the same tax rate applies to every litre of petrol sold in the city.
Factors Affecting Petrol Price in Nanded
There are more than a couple of elements that affect petrol rate in Nanded on a daily basis. They can be broadly divided into two categories: domestic factors and international factors. The currency exchange rate and the cost price of unrefined oil in the global markets are two international factors that affect petrol price in Nanded on a daily basis. The domestic factors include excise duty and VAT that may not affect price of petrol quite often.
International crude oil prices play a major role in fixing the price of petrol in India. To calculate petrol price at domestic level, the average price of Brent Crude Oil and WTI Crude Oil is considered. The price of crude oil fluctuates every day affecting petrol price in Nanded on a daily basis. Any decline in crude oil price in the international market today will be immediately passed to final consumers tomorrow. If the crude oil price increases today, the petrol price in Nanded will be hiked the next day.
Petrol prices in Nanded and the Indian rupee to US dollar exchange ratio are inversely proportional. If the Indian rupee appreciates against the US dollar, petrol prices in Nanded will increase and vice versa.
How to Track Petrol Price in Nanded Every Day?
If you wish to know petrol price in Nanded every day, there are multiple ways. One of the easiest and the quickest method is to download mobile apps of Indian oil companies. Ever since dynamic fuel pricing or daily revision of petrol prices have been implemented in India, oil companies are updating the revised prices every day by 6.00 am at every petrol station in Nanded. To make it easy for the consumers, they are updating their mobile apps with the revised petrol price on a daily basis.
Customers can thus download the apps of respective oil companies in their smartphones to know the petrol price in Nanded every day. Bharat Petroleum customers can download SmartDrive, Hindustan Petroleum customers have My HPCL app and Indian oil customers can use the Fuel@IOC app to know the latest petrol prices every day.
Effect of GST on Petrol Price in Nanded
Many of you might be wondering the effect of GST, the new tax regime in India, on petrol price. To keep it simple, the effect of GST on petrol price in Nanded and in any other Indian city is zero. The reason, till date petrol, diesel and other fuel products have been kept outside the GST tax net. Therefore, the state and central governments are still collecting excise duty and VAT on petrol.
If the central government decides to bring petrol under GST, the effect of it may be either positive or negative depending on the tax bracket the product belongs to. If the new tax rate is lesser than the combined taxes currently charged on the product, petrol prices in Nanded may come down, else they may go up.
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