Today's Petrol Price in Kerala

Step 1: Calculation of the Crude Oil Price

Overseas oil-producing companies sell unrefined oil to Indian oil marketing companies (OMCs) at benchmark rates. The present price of a barrel, which is equivalent to 159 litres, of crude oil is $49 in global markets. Therefore, the cost of a litre of crude oil is computed by converting US dollars into Indian rupees and then divided by 159. The cost of crude oil also includes freight charges paid by oil marketing companies.

Step 2: Calculation of Refinery Expenses

Upon importing crude oil from overseas oil companies, Indian oil marketing companies will shift crude oil to refineries for further processing. Crude oil is then clustered into several products such as diesel, coal tar, and petrol in distillation towers of these refineries. The cost that is incurred to convert crude oil into petrol is called refinery cost, which is added to the cost of crude oil. Moreover, crude custom levies and charges from ports to refineries are added.

Step 3: Other Cost Elements

Clustered petrol is now ready to be stockpiled in the stowage reservoirs of oil marketing companies. The actual rate of petrol, which is paid by end consumers, consists of all the aforementioned costs plus the commission charged by dealers, excise duty, value added tax (VAT), and total duties. In other words, the petrol price is the cost price that consists refining, procuring, marketing, the excise duty, and state taxes.

Factors affecting Petrol Prices in Kerala

The following factors affect petrol prices in Kerala:

1. Cost of Crude OilThe cost of crude oil influences the retail selling price of petrol. If it increases, the retail selling price will increase; if it decreases, the retail selling price will decrease. The cost of crude oil is influenced by many factors such as seasonal variations, weather reports, overseas demands and supplies, the capabilities of refineries, and political stability or instability in oil-producing countries.
2. Exchange RateThe exchange rate of the Indian currency to the base currency also has a direct impact on the cost of crude oil. For example, if the INR falls against the USD, the buying cost of crude oil in Indian rupees will rise. Similarly, if the USD falls against the INR, the cost of crude oil in Indian rupees will decrease.
3. Excise Duty and VATPetrol is taxed by the central and state governments. The cost price of petrol will increase if the percentage of Kerala petrol tax imposed by the governments increase. Similarly, the cost price of petrol will fall when the percentage of tax levied by both the governments decrease. On 4 October 2017, the central excise duty was reduced by Rs.2 by the central government. After the revision, the petrol rate in Kerala was reduced to Rs.72 from Rs.74.

Impact of GST on Petrol Rates in Kerala

The Goods and Services Tax (GST) was implemented in India in July 2017. It is the biggest tax reform since independence. Under the regime of GST, all classes of goods and services are taxed primarily under four slabs: 5%, 12%, 18%, and 28%. Petroleum products such as jet fuel, diesel, natural gas, and petrol have not been included in the regime of GST. So, GST does not impact fuel rates in Kerala including petrol and diesel. If GST is levied on petrol even at the highest rate of 28%, the tax outgo will be lesser.

Apply For A Fuel Credit Card - Reduce Your Petrol Expenses

*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.