Diesel Price In Ahmedabad Today

Do you know what is the methodology used to price diesel? Many diesel consumers may not have noticed that today we have a fresh mechanism called 'dynamic fuel pricing' to price diesel across the nation. It was introduced in June 2017. Since then, all state-owned diesel bunks have been reviewing diesel prices in Ahmedabad on a daily basis.

The move has been initiated by the government of India in order to bring transparency in fuel pricing and encourage the best inventory management principles. In the previous fuel pricing system, which is the fortnight-based revision, the price revision used to happen on the first and sixtieth of every month. The fortnight-based revision was in practice for the last 15 years.

Irrespective of the methodology used to determine the rate of diesel, the elements that form the diesel price are the same. They are global crude oil rates and the exchange rate of the INR to the USD. The new fuel pricing mechanism instantly transfers any fluctuations in these two elements to end fuel users. This is the reason why the diesel price in Ahmedabad is marginally varying nowadays.

Obtaining the latest diesel rates has been made easier for consumers in the city through an SMS service, an online facility, and a customer care service. All premier oil brands, which include Shell Oil, Hindustan Petroleum, Bharat Petroleum and Indian oil, offer these facilities. If you are a wholesale consumer of diesel from the capital city of Gujarat, be sure to get the latest diesel rate.

Trend in Diesel Prices in Ahmedabad:

The lowest diesel rate in Ahmedabad is at Hindustan Petroleum whereas the highest rate is at Shell Oil according to market reports. Right from the first day of dynamic fuel pricing until the recent cut in the excise duty, diesel rates in the city were growing slightly. After 4 October 2017, they were down by Rs.2. Experts predict them to be steady for the next one or two months.

Diesel Prices in Ahmedabad and other Prime Localities

In which city do you think diesel rates are cheaper? Undoubtedly, it is New Delhi followed by Bangalore, Chandigarh, and Gurgaon. Diesel is priced more in Ahmedabad compared to Chennai, New Delhi, Kolkata, Faridabad, and Bangalore. Amid all Indian cities, Mumbai has the highest price fixed for diesel. Diesel rates change within Indian cities because of the differences in the state VAT component.

How is the Retail Selling Price of Diesel in Ahmedabad Calculated?

The retail selling price (RSP) of diesel is the final price remitted by end consumers in Ahmedabad. The RSP is the sum of cost and freight price (C&F price), import charges, customs duty, the refinery transfer price (RTP), the excise duty imposed by the central and the VAT levied by the state, the commission charged by dealers, and pollution cess.

C&F price is the sum of free on board price (FOB) and ocean freight. The purchasing price of diesel is called FOB price. Freight is the transportation cost incurred by oil marketing companies. The excise duty is the tax imposed by the central government on diesel. It remains the same across the country. Diesel is presently taxed at 28.96% by the government of Gujarat.

Components of the Price Structure of Diesel in Ahmedabad

In technical terms, various components of the price structure of diesel include the cost of crude oil, the cost of fuel after refining, the price quoted to diesel retailers before VAT, the cost of fuel before VAT, and the final price. The cost of crude oil (including freight) is approximately Rs.20.19 a litre.

Fuel component, customs duty, the central excise duty, sales VAT and the dealer's commission account for 66%, 7%,13%,12% and 2% of the retail selling price of diesel in the city. About 95% of its actual consumption is in industries while the remaining 5% is utilised for transportation. The prices of all manufactured goods will go up if the cost of diesel increases, which leads to detrimental levels of inflation.

The process of calculating the final cost of diesel remains the same across all Indian cities, including Ahmedabad. Diesel is taxed differently by every state. The commission charged by dealers may vary within Indian states and cities. As a result, the cost of diesel varies from one city to another.

Influencers of Diesel Costs in Ahmedabad

What was the cost of a litre of diesel in Ahmedabad before 4 October 2017? It was Rs.65.49. When the central government reduced the excise duty by Rs.2 per litre, the cost of diesel has fallen to Rs.63.11 as on 9 October 2017. Thus, the central government's decision to decrease or increase the excise duty direct affects the final price in the city. The same goes with the tax levied on diesel by the government of Gujarat.

Another influencer is the cost of crude oil, which is traded globally. It is affected by seasonal fluctuations, overseas supplies and demand, the demand for crude oil from emerging economies of the world, weather conditions in oil-producing nations, the variations in the exchange rate of the Indian currency (INR) to the currency of the United State of America (USD).

What is the impact of GST on Diesel Prices in Ahmedabad?

The Goods and Services Tax (GST) is the largest tax reform in the country. GST is implied on almost all goods and services except petroleum products like crude oil, motor spirit, natural gas, high-speed diesel, and aviation turbine fuel. Petroleum products have been kept outside the scope of GST so as to maintain the revenues accumulated by states from these products. Therefore, diesel prices in Ahmedabad remain affected by GST till date. It is up to the GST Council to decide whether or not to impose GST on diesel.

Diesel Rates vs. Petrol Rate in Ahmedabad

Currently, the average price of diesel per litre is hovering around Rs.63 in the city. Petrol is sold at an average price of Rs.69.90. Both fuel prices are anticipated to be steady over the next month. The net difference in the prices of two fuels in Ahmedabad is considered moderate compared other prime Indian towns including New Delhi, Bangalore, Chennai, Mumbai, and Kolkata.