Diesel Price in Trivandrum Today

Factors which Influence the Diesel Price in Trivandrum

India imports more than 70% of crude oil from oil-producing countries. State-run Oil Marketing Companies (OMCs) purchase crude oil, refine and transport diesel to fuel stations across the country. Let's analyse the external and internal factors in detail.

1. Global Crude Oil Rates: One of the biggest influencers in revising the diesel price in a city is the cost of crude oil in the international market. Since crude or unrefined oil is produced by select countries and extensively used by people across the globe, crude oil is an important commodity to every country. Therefore, any production cuts, shortage in supply, higher demand or geopolitical tension lead to changes in crude oil rate. Any incline or decline in crude oil rates influences the diesel price in Trivandrum.
2. US Dollar Exchange Rate: Crude oil is purchased in US dollars in the global market. Since the US dollar fluctuates due to multiple factors, the cost to buy a barrel of crude oil is impacted. Any changes in the exchange rate of the dollar influence the diesel price in Trivandrum.
3. OMCs Profit Margin, Operating Costs & Dealer Commission: Oil companies ship crude oil from oil-producing countries, refine and transport it to cities across the country. Therefore, OMCs add their profit margins, operating costs and dealer (fuel station owners) commission to the Retail Selling Price (RSP) of diesel in Trivandrum. Hence, any revision of these charges changes the cost of diesel.
4. Tax on Diesel in Trivandrum: The government of India and the State government levy excise duty and local sales tax or Value Added Tax (VAT) respectively towards the sale of diesel in Trivandrum. While the Centre levies Rs.15.33 per litre, the Kerala government charges 25.60% on diesel. If and when the government revises taxes, diesel rates in Trivandrum is impacted. Taxes on fuel form the biggest component in India.

When are Diesel Prices in Trivandrum Revised?

India followed the fortnight pricing mechanism where the diesel price in Trivandrum is revised every fortnight. Oil companies included the average crude oil rate for the preceding fortnight and the US dollar exchange rate before selling fuel at its final selling price. However, OMCs were unable to pass on any sudden hike in crude oil to the customer as they had to wait a fortnight before implementing the difference. This led to losses incurred by oil companies. Also, any reduction in diesel prices due to the fall in crude oil prices was not passed on the consumer.

To offset the losses and to pass on even the slightest benefit to the customer the 'dynamic fuel pricing' mechanism was introduced. Under this mechanism, diesel prices are revised on a daily basis, which is updated at 6:00 a.m. daily. OMCs included the preceding day's crude oil and the US dollar exchange rate while revising the diesel price every day.

Pros & Cons of Dynamic Fuel Pricing Mechanism

Revision in diesel prices on a daily basis has its advantages and disadvantages. Below points strives to understand the pros and cons of the dynamic fuel pricing mechanism.

1. State-owned oil companies will be able to forecast their revenues or losses.
2. Slight changes in crude oil rates can be passed on to the end consumer.
3. Both the oil companies and the customer do not lose out for an entire fortnight in the event of a sudden fluctuation.
4. While oil companies will be able to pass on the price hike immediately to the customer, a decline in crude oil prices can be passed on the customers the next day itself.

How to Find the Current Diesel Price in Trivandrum?

With the daily revision in diesel prices, consumers can track the latest fuel price in Trivandrum through several methods as explained below.

1. Mobile Apps: OMCs have launched smartphone apps to track the diesel price in Trivandrum as well as in other cities in the country. Indian Oil has launched the 'Fuel@IOC' app, Bharat Petroleum has introduced the 'SmartDrive' app, while Hindustan Petroleum offers services via the 'MY HPCL' app.
2. Track Via SMS: Consumers can track the current diesel price in Trivandrum by sending SMS. The process below helps to find the diesel price.
   1. Indian Oil: Type RSPDealer Code and send SMS to 9224992249.
   2. Bharat Petroleum: Type RSPDealer Code and send SMS to 9223112222.
   3. Hindustan Petroleum: Type HPPRICEDealer code and send SMS to 9222201122.
3. Website: Oil companies update their respective website with the current diesel price in Trivandrum and in across cities of the country.

Calculation of Diesel Price in Trivandrum

The table below is the computation of the diesel price in Trivandrum recorded on the 3rd June 2018.

Is GST Applicable on Diesel in Trivandrum?

India moved to a uniform system of taxation known as the Goods and Service Tax (GST) for the trading of goods and services. However, petrol and diesel have been exempted from GST. By bringing diesel under the GST, the revenue generated over the sale of the fuel will be affected significantly by the government. The current tax rate on diesel is higher compared to the highest tax rate in the GST slab. Currently, GST is not applicable to diesel in Trivandrum. That said, if diesel or petrol is brought under the framework of GST, the final selling price of diesel will decline.

*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.