Diesel Price in Mangalore Today

For the fiscal year 2018-2019, the Union Budget was presented on 1 February 2018 by Arun Jaitley at the parliament. This budget was believed to have been very decisive with respect to diesel prices. As demanded, Finance Minister unveiled the decision to wane the central levy on diesel by Rs.2 per litre. The budget further proposed to withdraw the additional custom duty of Rs.6 a litre, but additionally levied a road cess of Rs.8 per litre. Eventually, diesel prices in Mangalore were left unchanged.

Current Fuel Pricing methodology in Mangalore

Prior to June 16 last year, all public-sector oil marketing corporations used to revise the diesel price once a 15 days, i.e., on 1 and 16 of every month. This fortnightly-based fuel pricing system is no longer in practice. There has been a paradigm shift in the way fuel pricing is done. Today's diesel price in Mangalore is determined under the dynamic fuel pricing mechanism.

Dynamic Fuel Pricing

This new fuel revision mechanism is also referred to as daily revision system. The mechanism considers the cost price of unrefined oil and the exchange ratio of USD/INR to reread the diesel rate in Mangalore every day. The revision is either mechanically or manually done at 6:00 a.m. by oil marketing entities, including Shell Oil, Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL) and Indian Oil (IOL) in the city. Therefore, we observe the price of diesel varying on a daily basis.

How do I check the latest Diesel Price in Mangalore?

It is very simple! Fuel consumers have three options to do so. The first option is to get the customised mobile applications downloaded on your mobile phones. The second option is to make use of SMS services and the third option is to make use of customer care services offered by each oil marketing company. Most fuel consumers prefer checking the current diesel price in Mangalore through online means.

Why Dynamic Fuel Pricing?

1. Dynamic fuel pricing is beneficial from the perspective of both, fuel users and marketing entities.
2. It does not have a waiting period of 15 days like before. The downs and ups in the rate of crude oil and the exchange rate are quickly transmitted to consumers.
3. It helps OMCs to reduce operational expenses and time.
4. OMCs can maintain an optimal level of stocks.
5. Cash inflows and outflows remain unchanged for OMCs.
6. OMCs can easily strike a balance between liquid assets and current liabilities.

Why has the Diesel Price in Mangalore increased over the last one year?

1. The cost price of Brent Crude oil has increased by almost 10%.
2. The commission charged by dealers has increases by Rs.1 per litre.
3. The profit margin of OMCs has increased marginally.

Which factors affect the Diesel Price in Mangalore?

1. INR/USD conversion rate: It is a most commonly traded exchange rate in the Forex market. Since the cost of crude oil is traded globally, the exchange rate directly affects the buying price of unrefined oil in India. Eventually, the RSP gets affected.

1. Taxes: Diesel is taxed domestically. If the government reduces the tax, the diesel price also reduces and vice versa. We can take the example of the central tax, which was lowered by Rs.2 per litre in the month of October 2017.

1. Crude oil rates: We have seen crude oil rates growing consistently in the last 12 months. It is a primary cost component that directly affects the RSP of diesel. In overseas markets, if crude oil rates increase, the RSP of the fuel increases and vice versa.

Diesel Price in Mangalore Today vs GST

Is diesel taxed at the GST rates? No, it isn't! The Goods and Services Tax (GST), which has been a new tax system, imposes tax at 5%, 12%, 18% and 28% on all types of commodities and services. But, diesel is not taxed at the GST rates. So, the present tax system leaves the diesel rate unaffected. The opposition parties are continually building pressure on the GST Council to tax diesel at the GST rates.