Diesel Price In Pune Today

Between 12 October and 21 October, the average diesel price in Mumbai was Rs.59.50. During the same period, it was Rs.57.21 in Bangalore. In Chennai, the average price was Rs.59.96. Among four cities, the cost of diesel per litre was more in Chennai followed by Mumbai, Pune and Bangalore.

How are Diesel Prices in Pune Revised?

Diesel rate in Pune are revised based on dynamic fuel pricing model that was implemented in India on 16 June 2017. According to the new fuel pricing model, fuel rates (petrol and diesel rates) are revised on a daily basis in sync with global crude oil prices and the currency conversion rate. State-owned fuel retailers, which include Indian Oil, Bharat Petroleum, Hindustan Petroleum and Shell Oil, are currently following dynamic fuel pricing or the daily revision.

Benefits of Dynamic Fuel Pricing

1. Diesel consumes can be aligned to market dynamics.
2. Pump rates will replicate daily fluctuations in worldwide Crude Oil prices and the exchange rate (INR/USD).
3. Bib leaps in diesel rates can be removed.
4. Oil companies are free from political influences.
5. Dynamic Fuel Pricing does not adversely affect end consumers.
6. Daily changes can be easily tracked online.
7. Diesel bunk owners can deploy the best stock management techniques.
8. Dynamic Fuel Pricing ensures transparency in fuel pricing.

All three state-run oil marketing entities provide an SMS service to help diesel consumers from Pune to trace the revised price. Consumers can also download the mobile applications created by oil marketing companies to get the latest update. Another option is to visit the website of any of these oil marketing entities. Revised diesel rates will also be displayed at diesel bunks.

Calculation of Diesel Prices in Pune:

We calculate the retail selling price of diesel based on a few cost elements, which are:

Cost of Crude Oil:

In the price structure of diesel, the cost of crude oil is the first cost element. The price that is paid by oil marketing entities to purchase unrefined oil from transactional oil marketing entities. Freight charges are also included in the cost of crude oil.

Refinery Transfer Price (RTP):

The imported crude oil will be transmitted to refineries to convert crude oil into diesel. Refinery transfer price is the price, which is charged by refineries for converting crude oil into diesel. It is remitted by oil marketing companies.

OMCs profit margin:

Oil marketing companies add their profit margin on the sum of the cost of crude oil and refinery transfer price. Therefore, the price that is quoted to dealers includes the cost of crude oil, refinery transfer price and the profit margin of oil marketing companies.

Central and State Taxes:

The tax that is levied on diesel by the central government is called the central excise duty. Diesel is also taxed by state government. In Maharashtra, diesel is taxed at 28.41% as on 4 October 2017.

Dealer commission:

Dealers charge a certain percentage of commission for supplying diesel to end consumers. The percentage of the commission may not be the same across the country.

All the aforementioned cost elements are added to arrive at the final selling price of diesel in Pune.

Factors affecting Diesel Prices in Pune

Before 3 October 2017, the cost price of a litre of diesel in Pune was Rs.61.76 per litre. Why did it reduce to Rs.59.43 on 4 October 2017? It is due to the reduction in the central excise duty on diesel by the central government. The government of Maharashtra also reduced the state VAT on diesel by 4% on 10 October 2017. The price of diesel after the announcement further fell down to Rs.58.55 in Pune. This is how the central excise duty and the state VAT affect the final price of diesel.

The exchange rate of the Indian currency against the US dollar is another factor impacting the final price of diesel. Since crude oil is traded in US dollars, the value of the INR makes a big difference to the cost of crude oil. If the USD falls against the INR, the cost of crude oil will reduce. If the USD gains against the INR, then the cost of crude oil will increase. The exchange rate is determined by the Reserve Bank of India, which is also called the central bank of India.

The biggest influencer of the final price of diesel is the cost of crude oil, which is incurred by oil marketing companies in order to buy crude oil from overseas oil companies. Crude oil is transacted in worldwide markets. If the cost price of unrefined oil goes up, the cost of diesel will increase. On the other hand, if the cost price of crude oil reduces, then the rate of diesel will decrease. The determinants of the cost price of crude oil include seasonal variations, the currency conversion rate, weather conditions, political movements in oil-producing countries and the demand for the fuel.

What is the Impact of GST on Diesel Prices in Pune?

The Goods and Services Tax is a newly introduced indirect tax platform. It is imposed on all kinds of goods and services that are sold within the country. Five petroleum products have not been brought under the GST purview. Thus, GST has no impact on diesel rates in Pune. What will happen if diesel is covered under the GST framework? The compliance cost will be doubled. The current diesel rate in Pune will diminish at least by 30%. The revenue source for the state and central government is unfavorably impacted.

*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.