Diesel Price In Noida Today

Dynamic Fuel Pricing mechanism is a mechanism that revises fuel prices on a daily basis in sync with unrefined or crude oil rates and the currency exchange rate. The price revision is done at 6:00 a.m. every day. Hence, it is extremely important to check the diesel price before you fuel your vehicles. In Noida, all diesel stations have been following this new fuel pricing mechanism since 16 June 2017. Be advised to make a note of the latest price.

Benefits of Dynamic Fuel Pricing

Dynamic fuel pricing mechanism was adopted in India after conducting a 40-day pilot in five Indian cities. The system brings transparency in fuel pricing as governments cannot influence oil marketing companies (OMCs). The fluctuations in crude oil prices and the INR/USD exchange rate could be easily transmitted to end consumers. Dealers can better manage their stocks and working capital. Consumers are aligned to market dynamics.

Diesel Price in Noida

Since the implementation of the daily revision or dynamic fuel pricing, diesel prices in all parts of the country have been growing marginally. 

Fuel Price Comparison

Diesel price varies within Indian cities due to the local tax. In New Delhi, the fuel price is low compared to other cities. On the other hand, the fuel price is more in Mumbai. The local tax is subject to change. In October 2017, Maharashtra, Uttar Pradesh, Madhya Pradesh and Gujarat have reduced the local tax imposed on diesel. According to the data released by Petroleum Planning and Analysis Cell, the local tax imposed on diesel in Uttar Pradesh was 20.19%. In Maharashtra, it was 25.38%. In New Delhi, it was 17.38%.

How is the Diesel Costs Computed?

It is essential to understand the stakeholders in the oil and natural gas industry. Oil marketing companies (OMCs), dealers and refineries are three important stakeholders. Oil marketing companies will buy crude oil from abroad oil companies by paying the price in dollars. Crude oil is traded in global markets. Refineries are the parties that convert crude oil rates into diesel. Finally, we have dealers who supply the fuel to end consumers. Therefore, the retail selling price of diesel consists of all expenses.

Retail selling price of diesel in Noida = cost of crude oil + taxes + OMC expenses + dealer commission + pollution cess + profit margin of OMCs

As on 13 November 2017, the cost of CTI Crude Oil per barrel was $57.03. 1 barrel is equal to 159 litres. Crude oil rates also include freight charges.

Taxes are of two categories: the central excise duty and the state VAT. The excise duty remains the same throughout the country. It was recently reduced to Rs.15.33 per litre from Rs.17.33 per litre on diesel. The state tax on diesel was 20.19% on 04 October 2017.

The costs incurred by oil marketing companies include refinery transfer price, entry taxes, operational expenses, marketing costs and other overheads.

Dealer commission varies from one city to another. The diesel stations, which are closer to supply centers, are likely to charge less commission.

Factors Affecting Diesel Prices in Noida

The exchange rate, crude oil prices and taxes are the major factors affecting Diesel Prices in Noida. The Retail Selling Price, also called the final price, increases if:

1. The INR weakens against the USD
2. Global crude oil rates increase
3. The local tax increases
4. The excise duty increases

Conversely, the final selling price decreases if:

1. The INR gains against the USD
2. The local tax decreases
3. Global oil prices decrease
4. The excise duty decreases

The exchange rate in India is fixed by the Reserve Bank of India, which is also renowned as the Central Bank of India. The rate is determined on the basis of the rate of inflation, interest rates, interest parity rates, imports and exports and the overall public debt. Crude oil prices are reliant on seasonal fluctuations, weather conditions, global reserves and surpluses and the demand for oil.

Impact of GST on Diesel Rates in Noida

The Goods and Services Tax (GST) has no impact on diesel prices in Noida since diesel has not been brought under the purview of GST, which is currently imposed at four rates: 5%, 12%, 18% and 28%. The lowest rate is 5% and the highest rate is 28%. The implementation of GST on diesel will affect the revenue source for the government. In a broad picture, the entire oil and natural gas industry does not fall under the scope of GST. The implementation will double the compliance cost for stakeholders.