Diesel Price In Kozhikode Today

Diesel is purchased in its crude form by Oil Marketing Companies (OMCs) such as Indian Oil, Bharat Petroleum and Hindustan Petroleum - who operate more than 90% of fuel stations in India - from the Organisation of Petroleum Exporting Countries (OPEC). The crude or unrefined oil forms the base of the diesel price in Kozhikode. Besides, there are several other factors which are taken into consideration to assess the diesel price in Kozhikode.

1. Global Crude Oil Rate: India imports more than 70% of crude oil from oil-producing countries. The cost of crude oil is dynamic in nature which is influenced by the increase or decrease in production, shortage in supply, higher demand, and geopolitical tensions. Whenever there is an instance of increase in the production of crude oil, the global crude oil price decreases and vice versa. Also, countries such as India and China typically have a higher demand for crude oil to supplement its economy. An instance of high demand leads to an incline in crude oil prices and in turn, affects the diesel price. Therefore, any fluctuations in the global crude oil impact the diesel rate in Kozhikode and in other cities.
2. US Dollar Vs. Indian Rupee Exchange Rate: Trading of crude oil happens in US dollars. If the US dollar weakens over the Indian Rupee, the crude oil price decreases and in tandem the diesel prices fall as well. However, if the US dollar strengthens, then the diesel price increases accordingly.
3. Excise Duty & Value Added Tax on Diesel: The Centre levies Rs.15.33 per litre as excise duty, while the state of Kerala charges 25.60% as the VAT. Any revision in the taxes leads to fluctuations in the diesel price in Kozhikode.
4. Profit Margin & Commission to Dealers: Oil companies purchase crude oil, transport it through the sea and refine it before it's retailed as diesel in the country. The fuel company include their profit margin, operating costs and the commission to dealers (petrol pump owners) before diesel is sold in its Retail Selling Price (RSP). If oil companies revise these charges, the diesel price in Kozhikode is revised accordingly.

How is the Diesel Price in Kozhikode revised?

Diesel prices are revised on a daily basis in sync with the global crude oil price and the currency conversion rate. This method is known as the 'dynamic fuel pricing' mechanism. Under this mechanism, fuel companies include the preceding day's crude oil rate and the US dollar exchange value before selling the fuel at its final selling price.

The dynamic fuel pricing mechanism has benefitted by both oil companies as well as consumers. Any reduction in the crude oil rate is passed on the customers immediately. Also, if there's a hike in the crude oil rate, oil companies are able to pass on the increment to the customer and not incur losses.

Prior to the 'dynamic fuel pricing' mechanism, India followed the fortnight revision method. Diesel prices were revised on the 1st and 16th of every month. Fuel companies would take the average of the preceding fortnight price of crude oil and the currency exchange rate. However, any sudden spike in the crude oil rate, fuel companies had to wait for a fortnight to pass on the increase to the consumer, thereby incurring losses. To avoid the losses, the dynamic fuel pricing was introduced from 16 June 2017.

Tips to Track the Current Diesel Price in Kozhikode

Fuel companies have introduced several innovative methods to track the latest diesel price in Kozhikode as well as other cities in the country. Below are the tips to track the latest fuel price:

1. Via Mobile Apps: Indian Oil has launched the 'Fuel@IOC' app which offers the latest diesel price, Bharat Petroleum has introduced the 'SmartDrive' app, while Hindustan Petroleum consumers can track the current diesel price through the 'MY HPCL' app.
2. Via SMS: Consumers can find the current diesel price by sending SMS to respective oil companies. The process below will enable you to find today's diesel price in Kozhikode.
   1. IOC: Type RSPDealer Code and send SMS to 9224992249.
   2. BPCL: Type RSPDealer Code and send SMS to 9223112222.
   3. HPCL: Type HPPRICEDealer code and send SMS to 9222201122.
3. Online Portal: Customers can get the latest diesel price through the oil companies' respective website.

How Often are Diesel Prices Revised?

Diesel prices in Kozhikode are revised on a daily basis taking into account the preceding day's global crude oil price and the currency conversion rate. The diesel price is updated daily at 6:00 a.m. IST which is automatically updated at automated fuel stations, while it's manually updated at non-automated petrol pumps.

Prior to 16 June 2017, diesel prices were revised on a fortnightly basis by including the preceding fortnight's crude oil price and the US dollar exchange value. However, this didn't let oil companies to pass on the reduction or the hike in crude oil prices to consumers and had to wait a fortnight to revise the diesel price. To offset the losses incurred and to pass on the benefits of a lower crude oil rate, the daily revision of diesel prices was introduced in the country.

Diesel Price Breakup in Kozhikode

To understand the concept of the 'dynamic fuel pricing' mechanism, let's look at an example. Below is the breakup of the diesel price in Kozhikode recorded on 3 June 2018.

GST Impact on Diesel Price in Kozhikode

Trading of goods and services come under the new taxation system known as the Goods and Service Tax (GST). However, petroleum products such as diesel and petrol have been kept outside the ambit of the GST. The revenue generated by the Centre and the State by charging excise duty and VAT respectively is relatively higher compared to the revenue generated through the highest tax slab in the GST.

To avoid lower revenue generation, products such as diesel has been exempted from the GST. If the government of India decides to bring diesel under GST, the diesel price will reduce and benefit consumers.

*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.