Diesel Price In Malappuram Today

Factors Which Influence the Diesel Price in Malappuram

As mentioned, diesel is purchased in its crude form from oil-producing countries before selling it in the country. Factors which influence the diesel price in a city are external and internal in nature.

1. International Crude Oil Rate: India purchases crude oil in barrels in the global market and the price of the unrefined oil is dynamic and increases due to production cuts, shortage in supply, or geopolitical tensions. Likewise, an increase in the output of crude oil or increase in supply leads to the decrease in the crude oil rate. Diesel prices are related to the change in the price of crude oil and when there's a change, diesel prices are revised in tandem with the global crude oil price.
2. Currency Conversion Rate: Trading of crude oil typically happens in US dollars, hence, any change in the exchange rate of the dollar over the Indian rupee, the cost to purchase the crude oil is impacted. If the US dollar appreciates over the rupee, the diesel price increases and vice versa. The US dollar exchange rate is one of the external factors which influences the revision of fuel prices in Malappuram and in other cities.
3. Oil Companies' Profit Margin, Operational Costs & Dealer Commission: Oil companies ship the crude oil to their refineries which are then refined and supplied to petrol pumps. A profit margin and operational costs are added prior to selling diesel in the country. Also, oil companies fix the dealer (fuel station owners) commission towards dispensing, storing and maintenance of the fuel stations. Any revision of these charges leads to a change in the diesel rate.
4. Tax on Diesel: Diesel attracts the Centre's excise duty and the State's Value Added Tax (VAT). While the excise duty is charged at Rs.15.33 per litre, the VAT levied by the government of Kerala on diesel is 25.06%. Taxes on diesel are the biggest component of the fuel price. Therefore, any change to the tax rate affects the diesel price.

Why do Diesel Prices change every day in Malappuram?

Until 16 June 2017, diesel rates were revised every fortnight. Diesel prices were changed on the 1st and the 16th of every month by including the preceding fortnight's global crude oil price and the US dollar exchange rate. However, oil companies were not able to revise the diesel price in case there's a sudden spike in the global crude oil price and had to wait a fortnight to pass on the increase to customers. This led to losses incurred by fuel companies. Also, if the crude oil rate declined, OMCs were unable to pass on the benefit to the consumer immediately.

To offset the losses, the 'dynamic fuel pricing' mechanism was introduced. Oil companies revise fuel prices on a daily basis by including the preceding day's crude oil rate and the currency conversion rate. Under this method, diesel prices are updated daily at 6 a.m. IST in the country.

Methods to Track the Current Diesel Price in Malappuram

With diesel prices revised on a daily basis, oil companies have introduced several methods to track the current diesel price in a city. Oil companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum operate more than 90% of fuel stations in India. They offer several services to get the latest fuel price across the country.

1. Mobile Apps: Indian Oil has launched the 'Fuel@IOC' app to track the current diesel rate, Bharat Petroleum offers service via the 'SmartDrive' app, while Hindustan Petroleum has introduced the 'MY HPCL' app.
2. SMS Services: Consumers can track today's diesel price through the SMS service. India's largest fuel retailer Indian Oil provides the latest diesel price by sending the SMA as RSP DEALER CODE to 9224992249, Bharat Petroleum customers need to send RSP Dealer Code to 9223112222, while Hindustan Petroleum consumers need to send HPPRICE DEALER CODE to 9222201122.
3. Online Portal: Oil companies update their respective websites with the current fuel prices in most of the cities.

Computation of the Diesel Price in Malappuram

To understand the concept of 'dynamic fuel pricing' mechanism, let's take the diesel price recorded on 3 June 2018.

Diesel Vs. Petrol Price in India

Petrol prices in India are higher compared to diesel as it attracts higher taxes as well as the refinery and operational costs are higher for petrol than diesel. Petrol attracts Rs.19.48 per litre as excise duty and VAT at 32.03%, while diesel is charged at Rs.15.33 a litre as excise duty and 25.60% as the VAT.

Is Goods and Service Tax (GST) Applicable on Diesel in Malappuram?

All goods and services rendered in the country attract the Goods and Service Tax (GST); however, petroleum products such as petrol and diesel have been exempted from GST. The Centre and states earn high revenue by levying excise duty and VAT respectively on diesel and petrol. The highest tax slab in the GST framework is lower compared to the taxes currently levied on diesel. Hence, the GST is not applicable to diesel in Malappuram. However, if diesel and petrol are brought under the ambit of the GST, the Retail Selling Price of diesel will certainly fall.

*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.