Today's Petrol Price in Tamil Nadu

How are Petrol Prices in Tamil Nadu Revised?

All petrol dealers across the state will use dynamic fuel pricing method to revise petrol rates. Dynamic fuel pricing is a newly introduced fuel pricing method that determines the price of petrol based on the exchange rate and overseas crude oil prices. The United States of America and Australia are also following the same fuel pricing method. In India, dynamic fuel pricing was implemented on 16 June 2017.

Dynamic Fuel Pricing is also called the daily revision. It is a streamlined version of the earlier fuel pricing method. The deployment of the daily revision method ensures transparency in fuel pricing. Petrol dealers will no longer face difficulties in stock management. Under the new method, petrol consumers can be aligned to market dynamics.

Like stock markets, petrol rates will change on a daily basis with the daily revision in place. The revision is done at 06:00 a.m. every day. Non-automated bunks in the state will manually update the petrol rate whereas automated bunks will do it automatically. All oil marketing companies have designed unique mobile applications, which can be downloaded to track the latest price.

How are Petrol Prices in Tamil Nadu Computed?

Retail selling price of petrol = cost price of crude oil + OMC costs + price charged to dealers + fuel costs before VAT

Cost of crude oil is the price paid by oil marketing companies to purchase crude oil from transnational oil marketing companies. The cost of crude oil is divided by 159 to compute the cost of crude oil per litre. 1 barrel of crude oil is equivalent to 159 litres. Freight expenses are also included in the cost of crude oil. If the cost of crude oil is $50 and the value of the INR against the USD is Rs.62, then the cost of crude oil will be Rs.3,100.

The costs incurred by oil marketing companies (OMCs) include refinery processing, operational expenses, transportation expenses, freight charges, entry taxes and freight expenses. The price charged to dealers includes the central excise duty imposed on petrol by the central government. The price charged to end consumers includes the cost of crude oil, the expenses incurred by oil marketing companies, the price charged to dealers, pollution cess and the state VAT. As on 4 October 2017, the state VAT imposed on petrol in Tamil Nadu was 25%.

Factors Impacting Petrol Prices in Tamil Nadu

The Retail Selling Price of Petrol Increases if:

1. The value of the INR falls against the USD.
2. The cost of crude oil goes up.
3. The central excise duty on petrol increases.
4. The state VAT increases.

The Retail Selling Price of Petrol Decreases if:

1. The state VAT decreases.
2. The central excise duty decreases.
3. The value of the USD falls against the INR.
4. The cost of crude oil decreases.

The Reserve Bank of India, the central bank, defines the value of the USD against the INR. The exchange rate is influenced by inflations, interest rates, public debt, political stability, terms of trade and economic performance. As discussed in the earlier section, the retail selling price (RSP) of petrol replicates the fluctuations in the exchange rate.

How does GST Impact Petrol Prices in Tamil Nadu?

The Goods and Services Tax (GST) is a consolidated indirect tax platform. It was introduced in India in July 2017. Since petrol has not been covered under the GST regime, petrol prices remain unaffected by GST. Currently, all types of goods and services are taxed under four slabs: 5%, 12%, 18% and 28%.

If GST is imposed on petrol at 12%, the cost of petrol in Tamil Nadu will be less than Rs.40. If petrol is taxed at 18% under the GST regime, then the petrol cost will be less than Rs.42. If petrol is taxed at 28% (the highest rate), then the petrol rate in Tamil Nadu will be less than Rs.45 per litre.

*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.