Diesel Price In Meerut Today

VAT on Diesel in Meerut - A Comparison

Petroleum Planning and Analysis Cell has unveiled a report on 01 April 2018. According to which, the Value-added Tax (VAT) on diesel per litre in Uttar Pradesh was 16.99%. Similarly, the VAT was charged at 28.60% in Andhra Pradesh, 18.82% in Goa, 25.53% in Gujarat, 14.33% in Himachal Pradesh, 18.28% in Bihar, 12.50% in Arunachal Pradesh and 18.25% in Karnataka.

Overview of Dynamic Fuel Pricing

India joins Australia, Japan, the USA and Russia with the introduction of dynamic fuel pricing, which is a fully streamlined fuel revision framework. It was adopted last year by fuel retailers, which include BPCL, IOC and HPCL. These fuel retailers should revise the diesel rate each day at 06:00 a.m. in consideration with the exchange ratio and crude oil rates. After the revision, they should update their official websites with the revised price.

Dynamic fuel pricing offers many benefits to OMCs, which are able to manage their operations effectively and efficiently. They will also be able to dampen their overall running costs. The system also allows them manage their cash budget with accuracy. Fuel pricing is done without the involvement of the central government and the state government.

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Computation of Diesel Price in Meerut

The current diesel rate is the sum of the cost of unrefined oil, central taxes, state taxes, pollution cess and the dealer's commission. As of April 2018, the cost of a litre of unrefined oil stood at Rs.26; the expenses incurred by OMCs were estimated to be Rs.10.30 a litre; on diesel per litre, the excise duty was revised to Rs.15.33; and the VAT was fixed at 16.99% in Uttar Pradesh. The commission charged by dealers was Rs.2.51 a litre.

Factors Affecting Diesel Price in Meerut

1. Exchange rate: The USD/INR exchange rate represents the value of the USD against the value of the currency in India. Daily variations in the exchange rate will have a big impact on current fuel prices in Meerut. How? Fuel companies require crude oil to produce either petrol or diesel or petroleum products. It is purchased in international markets by paying in US dollars. If the USD gains the value against the local currency, the cost price of unrefined oil will appreciate. On the other hand, if the INR gains the value against the USD, the market value of unrefined oil will fall proportionately. Thus, the current fuel rates in Meerut will change accordingly.

1. Crude oil cost: Cost of crude oil increases when oil exporting nations declare a production cut and the weather does not support the production of crude oil. It also gains when the demand for the oil increases in global markets. Any changes in crude oil rates will proportionately impact the petrol price in Meerut. Let's consider an example. Crude oil prices have gone up to $65 a barrel recently in overseas markets. Due to which, the diesel rates in Meerut and other cities in India have broken their previous highs. It has also been expected to go up marginally in the near future.

1. Taxes: Like mentioned earlier, on diesel, two categories of taxes are charged. The Central Government imposes the excise duty universally on diesel. In case of the Value-added Tax (VAT), it varies from within Indian regions. Fuel corporations have to reset the fuel price in tandem with these two forms of taxes. They will hike the fuel rate when the Central Government increases the excise duty. The same action is enforced when the State Government of Uttar Pradesh increases the Value-added Tax (VAT) on diesel.

Influence of GST on Diesel Price in Meerut

How are diesel buyers taxed currently? Well, they are not taxed under the GST, which is a recently announced tax framework in India. As you know, the GST Committee has been established to govern the functioning of the GTS tax framework. The Committee has fixed the tax slabs. As of now, the highest tax slab is 28% and the lowest tax slab is 5%. Other two tax slabs include 18% and 12%. In Meerut, if diesel is taxed at 28%, the highest GST tax slab, the fuel price will drop by 20-25%. Consumers will be happy, but the Central Government is not willing to lose its revenues. This is the reason why diesel is outside the scope of the GST as on date. The fuel may be included. Undoubtedly, the GST Committee makes the necessary changes to ensure that the enforcement of the GST framework does not impact the Central Government's revenues.

*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.