Diesel Price In Thrissur Today

Who Decides Oil Price in India?

As mentioned, diesel prices are determined by several elements which affect fuel prices in the country. Diesel is purchased in its crude form by State-run oil companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum. These companies purchase more than 70% of crude oil from oil-producing countries by trading through US dollars.

While the crude oil rate and the US dollar conversion rate are external in nature, the tax levied on diesel, profit margins and dealer commissions are internal factors. Let's review the external and internal factors in detail.

1. International Crude Oil Price: Crude oil prices are dynamic in nature which is influenced by the output of oil-producing countries as well as the demand and supply of unrefined oil. When there's a production cut the prices of crude oil increases, likewise, if the output is increased, crude oil prices decline. Therefore, a change in the crude oil rate impacts the cost to purchase a litre of diesel in Thrissur as well as other cities in the country.
2. US Dollar Conversion Rate: Trading of crude oil is done through US dollars. The exchange rate of the US dollar changes every day against other emerging currencies in the market. With the US dollar exchange rate revised daily, the cost to purchase crude oil is impacted. Hence, any revision in the currency conversion rate, diesel prices are affected.
3. Fuel Companies' Profit Margin & Dealer Commission: Oil companies transport crude oil from oil-producing countries, refine it and then supply it to fuel stations across the country. These companies retain a profit margin and other operational costs before diesel is sold. Also, fuel companies fix the commission for dealers or fuel stations owners to the price of diesel. A revision of these charges leads to a change in the diesel price.
4. Excise Duty & Value Added Tax (VAT) on Diesel: The tax on the diesel price is the biggest component. The government of India charges excise duty of Rs.15.33 for a litre of diesel, while the state government of Kerala levies VAT at 25.60%. Diesel prices are influenced by any revision in the excise duty or the VAT.

Why do Diesel Prices Change Every Day?

Diesel prices are revised due to the factors listed above and in India, prices are changed on a daily basis. The daily revision in diesel prices method is known as the 'dynamic fuel pricing' mechanism. Under this pricing method, both the customer as well as oil companies are able to take advantage of the latest crude oil rate.

Oil companies price diesel by including the preceding day's crude oil price and the exchange value of the US dollar. Prior to the 'dynamic fuel pricing' mechanism, India used to revise fuel prices on a fortnightly basis. Prices were changed on the 1st and the 16th of every month. However, this mechanism didn't allow oil companies to pass on the benefit or increase in fuel prices to customers immediately and had to wait a fortnight.

Under the new pricing mechanism, customers can benefit a reduction in crude oil prices the next day itself and oil companies are able to pass on the increase in crude oil rates to the customer without incurring losses.

Tips to Track the Current Diesel Price in Thrissur

With fuel prices revised daily, it could be a challenge to find the latest diesel price in a city. Oil companies have introduced several ways to track the current price of diesel. The tips below enables customers to track today's diesel price in Thrissur.

1. Track Through Mobile Apps: Mobile application have become a boon for customers and oil companies have launched their respective apps which tracks the latest diesel price in Thrissur as well as other cities. The 'Fuel@IOC' app by Indian Oil offers the latest fuel price, Bharat Petroleum has introduced the 'SmartDrive' app, while Hindustan Petroleum has the 'MY HPCL' app.
2. Track Through SMS Service: Consumers looking to utilise the SMS service to track the current diesel rate can follow the process below:
   1. IOC: Type RSPDealer Code and send the SMS to 9224992249.
   2. BPCL: Type RSPDealer Code and send SMS to 9223112222.
   3. HPCL: Type HPPRICEDealer Code and send SMS to 9222201122.
3. Track Through the Oil Companies' Website: Consumers can track today's diesel price in Thrissur by visiting the oil companies' respective website.

Calculation of the Diesel Price in Thrissur

Now that we understand the concept of daily revision of diesel price and the factors which influence the change, let's take the diesel price in Thrissur recorded on 3 June 2018 to interpret the pricing mechanism.

GST in Diesel in Thrissur

Currently, diesel does not come under the purview of the Goods and Service Tax (GST) and continues to attract the Centre's excise duty and the State's VAT. Petroleum products including diesel have been exempted from the GST. The revenue generated by taxing diesel is significant for the government exchequer; however, the highest tax slab in the GST is lower compared to the current taxes on diesel. By bringing diesel under the ambit of the GST, the government will lose a considerable revenue, hence GST is not applicable to diesel in Thrissur.

*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.