Petrol Price In Dindigul

Petrol prices in Dindigul changes daily similar to cities across the country. Various factors influence the revision in petrol prices in India leading to an uneven pricing of the fuel. Why do petrol prices change daily? Who controls petrol prices in India? How is the petrol price calculated? Below is an analysis of the determinants of the petrol price in a city which strives to find out how fuel is priced in India.

Components of the Petrol Price in Dindigul

State-owned oil companies import more than 70% of crude or unrefined oil from oil-producing countries. The crude oil is then refined and sold in the country. While the price of crude oil is the base price of petrol, internal factors such as taxes and operational costs contribute to the petrol price in Dindigul or other cities in India.

1. Global Crude Oil Price: The crude oil rate is dynamic in nature and tends to fluctuate based on the production of crude oil, any instances of shortage in supply, geopolitical tensions as well as higher demand leads to an increase - emerging economies such as India and China have a higher demand for crude oil in the market. Any variations in these factors influence the petrol rate in cities such as Dindigul. Crude oil is sold in barrels and the value at which the unrefined oil is bought is called Indian Basket or Indian Crude Basket price. Fuel companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum operate more than 90% of fuel stations across the country. These oil companies refine the crude oil and transport petrol to fuel stations across Dindigul.
2. US Dollar Exchange Rate: Trading of crude oil typically happens in US dollars and any fluctuation in the value of the US dollars impacts the petrol price. When there's an instance of a weaker rupee over the US dollar, the cost to pay for a barrel of crude oil increases. Hence any fluctuation on the US dollar value has a direct influence on the Retail Selling Price (RSP) of petrol in a city like Dindigul.
3. Excise Duty & Local Sales Tax or Value Added Tax (VAT): Sale of petrol in India attracts Centre's excise duty and the respective State's sales tax or VAT. Taxes on petrol is the highest component in the petrol price. While the Centre levies excise duty at Rs.19.48 a litre, Tamil Nadu charges VAT at 32.06% on the sale of petrol in Dindigul.
4. Oil Companies' Profit Margin & Dealer Commission: Oil companies purchase crude oil and transport them to India. The unrefined oil is then refined and supplied to fuel stations across the nation. The oil companies add their profit margins and other operational costs to the final selling price of the petrol. Also, these fuel companies fix the commission for dealers or otherwise known as fuel station owners.

When Does the Petrol Price Change?

Petrol prices in India are revised on a daily basis. This method of pricing is known as the 'dynamic fuel pricing' mechanism. Under this mechanism, the previous day's crude oil rate and the US dollar exchange rate is taken into consideration before fixing the petrol price in Dindigul and in across cities in India. Petrol prices are updated daily at 6 a.m. IST. While automated fuel stations update the petrol price automatically, it's manually updated at non-automated fuel stations.

Prior to the daily revision in the petrol price, India followed the fortnightly revision by including the average price of crude oil over the fortnight as well as the exchange rate of the US dollar. However, this did not let oil companies change the petrol price in case of a sudden spike or decline in crude oil prices in the global market, leading to losses incurred by these companies. Hence, the daily revision was introduced to offset any changes in the crude oil prices.

How to Track the Current Petrol Price in Dindigul?

With petrol prices being revised on a daily basis, the below methods will track the current petrol price in Dindigul as well as other cities in the country.

1. Mobile Apps: Indian Oil has launched the 'Fuel@IOC' app to track the current petrol price in a city, Bharat Petroleum has developed the 'SmartDrive' app, while Hindustan Petroleum's 'MY HPCL' which offers the latest petrol price in Dindigul.
2. SMS Service: For those looking to take advantage of the SMS service, oil companies offer services via SMS as well. The process below will track the petrol price at a particular petrol station.
   1. Indian Oil: SMS RSP Dealer Code to 9224992249.
   2. Hindustan Petroleum: SMS HPPRICE Dealer code to 9222201122.
   3. Bharat Petroleum: SMS RSP Dealer code to 9223112222.
3. Online Portal: Consumers can visit the respective oil-companies' website to track the latest petrol rate in Dindigul.

Impact of GST on Petrol

As mentioned, the sale of petrol in India attracts excise duty and VAT and the new taxation system of Goods and Service Tax (GST) does not apply to petroleum products such as petrol and diesel. Petroleum products are exempted from the GST. This is because the current taxes on petrol is higher compared to the highest tax slab in GST. Therefore, if petrol is brought under the ambit of the GST, the government's revenue is impacted. However, if petrol is brought under the framework of the GST, petrol prices will reduce and lower the burden on the common man.