Petrol Price in Tirunelveli
Petrol is gaining demand in India. The price of the fuel is also unstoppable. It has been growing at a rapid rate since last 4-5 months in all major cities in India, including Tirunelveli. Did you observe the recent moves? Petrol prices are on the rise mainly because of two reasons. The first reason is that the market price of a barrel of crude oil has touched $65. It is expected to rise by 15% by 2019. The fuel retailers, who supply petrol to end customers, have hiked their commission by Rs.1 per litre on petrol and diesel.
The petrol price today in Tirunelveli, i.e., 6 March 2018, is Rs.75.47 per litre. The price per gallon is Rs.281.41. Today, a barrel of petrol costs around Rs.11,821.65. One barrel is equal to 159 litres whereas one gallon is equivalent to 3.785 litres. According to sources, the highest petrol price of Rs.74.20 per litre was registered on 18 January 2018. The lowest petrol price of Rs.70.87 per litre was registered in the city on 20 October 2017. Over the last six months, the lowest petrol rate was registered on 22 July 2017. It was Rs.66.77 per litre. On the other hand, the highest petrol rate in Tirunelveli was registered on 1 April 2017. It was Rs.66.77 per litre.
Excise Duty and VAT in Tirunelveli
The Central Government charges an excise duty on petrol. It had recently revised it to Rs.19.48 per litre. The excise duty also encompasses a road cess, which has been recently announced in the Union Budget 2018-2019. The tax levied by the Central Government remains the same across the country, but VAT fluctuates from state to state. In Tirunelveli, Tamil Nadu, it is 34%. In Telangana, it is 35.20% and in Karnataka it is 30%. Similarly, in Delhi, it is 27%. In Andaman and Nicobar Islands, it is the lowest at 6%. In Goa, it is 17%.
Dynamic Fuel Pricing vs Current Petrol Prices in Tirunelveli
Since 16 June 2017, oil marketing companies, which are publicly-owned, have been making use of dynamic fuel pricing to revise the petrol rate in Tirunelveli. The rate for any given day shall effect from morning 06:00 a.m. Prior to which, the next date’s petrol price shall be intimated to dealers from oil marketing companies at 8 p.m. The fuel price shall be determined in line with the value of the USD against the value of the Indian rupees and crude oil prices. The previous day’s readings shall be taken into account to determine today’s petrol price in Tirunelveli.
How have Petrol Rates moved in Tirunelveli since Dynamic Fuel Pricing?
Dynamic fuel pricing revises the petrol rate in Tirunelveli every day. So, the revised price shall not be the same. It varies based on changes in the exchange rate and the market value of crude oil. Fuel prices began sliding after introducing dynamic fuel pricing. After 15-20 days, they began increasing in the city of Tirunelveli. Over the last 180 days, they progressed in an upward trend and touched their historical highs in Tirunelveli, Delhi, Mumbai, Kolkata and Chennai respectively.
Who gains from the new Fuel Pricing System?
All participants involved in the business of fuel retailing shall gain from dynamic fuel pricing. They are oil marketing companies, fuel suppliers, fuel consumers and the government. Fuel consumers are benefited since dynamic fuel pricing quickly transfers the daily movements in the petrol price determinants (exchange rate and crude oil prices). If the market price of crude oil falls today, the benefit shall be rapidly conveyed to end fuel customers in Tirunelveli. If the market price of crude oil goes up, the price rise shall also be instantly conveyed to end fuel users.
How to get Current Petrol Price in Tirunelveli
There are three ways through the latest petrol rate in Tirunelveli is obtained. Since fuel prices are revised on a daily basis, fuel consumers are required to follow any of the following ways:
- SMS services: All publicly-owned oil marketing entities, including OIL, BPCL and HPCL, provide the revised petrol price in Tirunelveli whenever customers send an SMS request.
- Mobile applications: Mobile applications are widely in use today. They include SmartDrive, My HPCL and Fuel@IOC.
- Online portals: Many online portals provide the revised fuel prices in Tirunelveli. Fuel consumers may consider this option as well.
Assessment of Petrol Prices in Tirunelveli
How are fuel rates in Tirunelveli determined? Let’s understand the process that has five steps. In the first step, we compute the cost of unrefined oil. Let’s assume the cost of unrefined oil is $60 and the value of the USD against the INR is Rs.64, then the cost of a litre of crude oil is Rs.24.15, which is 60X64/159. In the second step, we assess the overall expenses spent by BPCL, HPCL and Indian Oil.
In the third step, we include the central tax, which is Rs.19.48 per litre as of February 2018. In the fourth step, we include the Value-added Tax (VAT). In Tamil Nadu, the VAT is levied at 34% on the price charged to fuel dealers. In the last step, we consider the pollution cess of 25 paise and the dealer commission. Like VAT, the dealer commission differs from city to city. This way the petrol price in Tirunelveli is computed. As of 6 February, it was Rs.75.47 per litre.
Forces Impacting Petrol Price in Tirunelveli
Today’s petrol price in Tirunelveli is impacted by the fluctuations in the exchange rate. When the exchange rate varies, the cost of unrefined oil will vary in global marketplaces. The exchange rate of USD/INR is determined on the basis of the inflation rate in India and the USA, the bank interest rates in the USA and India, the imports and exports between these two countries, etc.
It is decided on a daily basis by the Central Bank of India. Market prices of unrefined oil are also a major influencer. They fluctuate on the basis of the economic performance of oil-extracting countries, the demand and supply of unrefined oil globally, the political trends in oil-extracting countries, etc. Likewise, any variations in taxes (both central and state) shall affect the petrol price in Tirunelveli.
GST vs Fuel Prices in Tirunelveli
GST, the Goods and Service Tax, is defined as a value-added tax charged on a majority of services and commodities retailed for indigenous usage. Though GST is remitted by fuel consumers, but it shall be remitted to the government by merchants. It came into existence in July last year. Since petrol accumulates revenues to the government, it is currently outside the purview of GST. The inclusion of petrol under GST shall dampen not only the petrol rate in Tirunelveli, but also the government’s earnings. This is the present scenario as far as GST is concerned.
Should the GST system be levied on Petrol?
The GST system may or may not be levied on petrol. The GST Council has the right to include petrol. If the GST Council proposes to tax petrol under GST, the present tax rates are required to be redefined. India imposes GST at 5%, 12%, 18% and 28% currently. The Central Government shall not be able to accumulate the required amount of revenues even if it decides to tax petrol at 28%. As per market watchers, the insertion of petrol under GST has been a better option. It makes the taxation process unified.
*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.