Today's Diesel Price in Himachal Pradesh

Historical Diesel Prices in Shimla, Solan and Dharamsala

In Shimla, the diesel price in Shimla has been moving in an upward trend since the beginning of November 2017. In October 2017, the fuel price reduced to Rs.57.90 per litre on the closing day from Rs.59.11 per litre. In September 2017, the fuel was sold at Rs.57.33 per litre on the opening day. In Solan, during the first week of November 2017, the average price of diesel was Rs.58 per litre. During the same period, the average diesel price was above Rs.58.00 per litre in Dharamsala.

How are Diesel Prices in Himachal Pradesh Revised?

As discussed earlier, dynamic fuel pricing mechanism has been introduced in India to revise fuel rates. This mechanism has been in use in the country since 16 June 2017. Under this new mechanism, all state-run oil marketing companies will revise diesel and petrol prices every day in sync with global crude oil rates and the exchange rate. The same mechanism is followed in other developed countries such as the United States of America, Australia and Russia.

Himachal Pradesh has a good network of diesel stations scattered across all parts of the state. A majority of fuel stations are non-automated and will revise fuel prices manually. All automated petrol stations will revise fuel prices automatically. The price revision is done at 06:00 a.m. every day. Consumers can trace the latest price by downloading the mobile applications created by oil marketing companies or by SMS alerts.

Advantages of Dynamic Fuel Pricing

1. The system entrusts 100% fuel transparency.
2. Inventory management will now be easier for dealers.
3. The working capital can be well managed.
4. The Indian fuel retailing sector can be linked to global markets.
5. The daily variations in crude oil rates and the INR/USD are passed on to end customers.

State Levies on Diesel

In India, diesel is a subsidised commodity. It is taxed by the central and state governments. The central excise recently reduced to Rs.15.33 per litre on 3 October 2017. The excise duty remains unchanged throughout the nation. As far as local taxes are concerned, diesel is taxed differently. As per the information revealed by Petroleum Planning and Analysis Cell on 04 October 2017, the local tax or the Value-added Tax (VAT) imposed on diesel in Himachal Pradesh was 16%. It was 19% in Karnataka. In Madhya Pradesh, it was 30.24%.

How are Diesel Prices in Himachal Pradesh Computed?

Dealers, oil marketing companies and refineries are the three stakeholders involved in the oil and natural gas industry. Oil marketing companies (OMCs) will import crude oil from overseas oil marketing companies. The imported crude oil is then shifted to refineries for further processing. The refined oil will be supplied to end consumers by dealers by charging commission. Therefore, the retail selling prices of diesel paid finally by end customers includes all expenses.

The cost of crude oil, refinery transfer price, taxes, entry taxes, marketing expenses and operational costs are the various types of expenses incurred by OMCs. As on 9 November 2017, the price of WTI Crude Oil per barrel was $56.84. Taxes are a major element in the price structure of diesel. They are of two categories: a) the local tax and b) the excise duty. The excise duty is charged by the central whereas the local tax by the state government.

The retail selling price of diesel = taxes + crude oil rates + OMC expenses + profit margin of OMC + dealer commission + pollution cess

Factors Affecting Diesel Prices in Himachal Pradesh

Which factors do you think will affect diesel rates in Himachal Pradesh? The diesel price is impacted by crude oil rates, the INR/USD exchange rate and taxes. Crude oil is an international commodity and the price of which depends on various factors. The INR/USD is a highly volatile currency pair. Taxes are also subject to change.

Therefore, the Retail Selling Price of Diesel increases if:

1. The cost of crude oil goes up
2. The USD appreciates against the INR
3. The central and state governments increase the tax rate on diesel

The Retail Selling Price of Diesel decrease if:

1. The cost of crude oil decreases
2. The USD depreciates against the INR
3. The central and state governments decrease the tax rate on diesel

What is the Impact of GST on Diesel Prices in Himachal Pradesh?

The Goods and Services Tax (GST) is a multi-stage, unified tax system introduced in India in July 2017. All types of commodities and services are taxed under the GST regime currently. GST is not applicable to diesel and petrol and therefore, the current diesel rate in Himachal Pradesh is not impacted by GST. The fuel price will reduce drastically if GST is levied even at the highest rate.

*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.