Diesel prices in Haryana
Haryana is one of the 29 states of India which is located at the northern part of the country. The state shares boundaries with Rajasthan in the south and west and Himachal Pradesh and Punjab in the north and at the east lays Delhi. It also plays a very important role in the country’s economy because of its rich industry in the field of agriculture and commerce. Most of the produce from Haryana comprises cotton, milk, groundnuts and dates. Haryana is a major cotton producer and home to a renowned textile manufacturer in India. Reliance Industries, India is one of the world’s largest grass root refinery which is based in Jamnagar. In addition, cement and petrol are also known as the leading industrial products of India which leads to massive terminals of liquefied natural gas (LNG) in three different locations such as Gujarat, Dahej and Hazira.
The cities and villages in Haryana are connected to each other by roadways and railways. City buses are the most popular public transports in Haryana. Haryana Roadway State Transport (HR) is public transport that services passengers to different destinations in Haryana state. Petrol or petroleum products like diesel are used not only for transportation but also for industrial and agricultural purposes in Haryana. Due to the increasing population in Haryana and other major cities like Ahmedabad, Surat, and Vadodara, the consumption of diesel is on the rise. The increase in purchasing power has led to growing demands fuel and vehicular purchases.
Haryana, being a state that is rich in agriculture, consumes a lot of diesel for farming and equipment. Agricultural workers from Haryana use equipment that is powered by diesel in farming and harvesting. In the dry season, diesel is a useful source of power generation.
According to a report by Nielsen, 70% of diesel in India is consumed by the transport sector and the remaining by the agriculture sector. In Haryana, most consumers have shifted to CNG and diesel because the demand for petrol is lesser.
Why are Diesel rates so high in Gujarat?
Diesel prices in Gujarat are slowly inching towards Rs. 76.45per litre. As of 25th September 2018, the diesel prices are highest in Bhavnagar at Rs 80.73 per litre, Surendranagar at Rs 80.34 per litre and Dahod at Rs 80.48 per litre. Leading cities like Ahmedabad, Vadodara and Surat at still hovering at Rs 79 per litre for diesel.
The reasons behind the surge in fuel prices are many. Firstly, the rising cost of crude oil prices owing to the supply cuts by the Organization of the Petroleum Exporting Countries (OPEC). India is the third largest importer of oil in this world and is particularly exposed to this risk. Coupled with this, the geopolitical tensions and trade wars across the US, China and Iran have also added to the fuel pricing woes.
Moreover, the depreciating rupee has added to the woes and made import costs of crude oil higher for India. As crude oil price forms the base cost for diesel, it is bound to get costlier.
Thirdly, the Centre and State Governments impose taxes on fuels that vary across states. Due to this, the price of diesel continues to remain high.
Fourthly, due to high economic activity in Gujarat, the per capita consumption of diesel is high, which translates into more demand and hence higher rates for retail sales.
India’s annual diesel consumption could rise to 150 billion litres by 2030 from 90 billion litres now, Oil Minister Dharmendra Pradhan.
Components of Diesel prices in Gujarat
The pricing of diesel in Gujarat is made up of different components, which are:
Free on-Board Price (FOB): The purchase price of petrol is called Free On-Board Price which is also the price paid by Indian oil marketing companies when purchasing crude oil from overseas dealers.
Customs Duty: Customs Duty is taxes imposed by the Government of India on the import of crude oil.
Import Parity Price: Import Parity Price (IPP) is the combined price of diesel paid by Indian oil marketing companies at an Indian port. IPP is the aggregate of import charges, customs duty, and cost and freight price.
Refinery Transfer Price: Refinery transfer price is the price settled by oil marketing companies to refineries for transferring the diesel.
Inland Freight: Inland freight is the transportation price paid by oil marketing companies for transferring diesel from refineries to different retail outlets.
Depot Price: Depot price is the price that owners of retail outlets pay to purchase the diesel from oil marketing companies.
Freight: The oil is imported from overseas dealers by Indian oil companies and thus there is transportation involved. The prices paid for transportation of oil is call freight charges which will be added to the Free On-Board Price. The combined price is known as the cost and freight price.
Import Charges: Three charges mainly add up to Import charges. These are insurance charges, port dues, and ocean losses. The premium which is paid to the Insurance provider for obtaining the monetary protection is called Insurance charges. Port dues are charges paid in lieu of availing the facilities at the port.
Excise Duty: This is a duty imposed by the Central Government on imported diesel. All rates throughout the country are the same. Currently, the Excise charged is Rs. 15.33/Lt.
VAT: Value-added tax (VAT) is the tax imposed by the state government on petrol. VAT differs across states. As of March 2018, the tax rate imposed on diesel in Haryana was 20% plus the 4% cess.
It should is noted that roughly 40-45% of the retail cost of petrol is formed by various taxes and rest by dealer commissions. On 10th October 2017, the Haryana government reduced the value-added tax (VAT) on petrol and diesel by 4%. The state government used to charge 24% VAT on and diesel and an additional cess of 4 %. Now, the effective VAT is 20% plus the 4% cess.
How frequently are Petrol Prices in Delhi Computed?
The government of India has changed its criterion of the fuel pricing since last year. They now follow the dynamic fuel pricing model. As per this new model effective from 16th June 2017, the diesel price is calculated on a daily basis instead of a fortnightly basis. This model has been adopted to bring about transparency and minimize incidents of manipulation by government and political parties. Dynamic Fuel prices are now followed by all the state-owned oil marketing companies such as Indian Oil, Shell India, Bharat Petroleum, and Hindustan Petroleum.
As per the dynamic fuel pricing model, rates will change at 6 am daily, based on the change in the previous day’s cost. The various ways through which you can access the daily change in diesel prices are:
You can track the prices through the apps – [email protected] – Indian Oil. The app lets you know a daily update on the revisions in all cities. It can be downloaded by visiting the Google Play store and Apple Store. BPCL also has a similar app called SmartDrive; while HP’s very own app is called MYHPCL.
Send a text – (Retail Sale Price) RSPDEALER CODE to 9224992249 (For Indian Oil)
For Bharat Petroleum, the number is 9223112222.
For Hindustan Petroleum, you can send SMS HPPRICEDEALERCODE to 9222201122.
Note: Petrol refilling stations also displays the dealer code of each petrol pump.
You can access the daily diesel prices for Delhi on the Indian Oil website using the RO locator. The website has prices listed as per the retail outlets of Indian Oil.
Benefits of dynamic fuel pricing
Experts believe that this new pricing model will pass on the benefit of even the minutest change in international oil prices to the dealers and the consumers. There could be sudden moves in diesel prices that could be seen over the fortnightly calculation; the dynamic model removes such anomalies. The Dynamic fuel pricing model has placed India on a global stage as other advanced countries are already following this model.
It is believed that the Dynamic pricing model will be instrumental in restricting speculative forces and there will parity in the domestic as well as international price of diesel.
The daily changes in rates of the diesel prices will make consumers more aligned with the market conditions. If there is a decline in crude oil prices, the benefit will be passed on to the customer the very next day. On the other hand, if the crude oil prices rise, the oil marketing companies will be able to pass on the price hike to the consumers.
GST and Diesel prices in Haryana
As of today, fuel and fuel-based products are not taxed as per GST rates. Experts opine that existing taxes one of the main reasons why petrol prices are so high in Delhi. Since May 2014, there has been an increase in excise duty. Even though the government has slashed the excise duty on petrol according to the Budget 2018, there has been no reduction in diesel prices. This is also attributed to the introduction of Rs. 8 per litre as Road Cess.
Therefore, there is an increased clamour for inclusion of fuel prices under the GST. However, according to a government source, fuel and fuel-based products may be partially included under the GST. As a result of which the highest slab of GST at 28% and state-applicable VAT, both may be levied on diesel, making it even more costly. Experts state that this is how GST is levied on diesel in other parts of the world. This is a political call and the centre and state government should unanimously decide on the best course of action. We can only anticipate a reduction in diesel prices in the future.
Ways to save diesel cost on your transport
Cashback on fuel cards
You can tackle rising petrol prices with certain credit/debit cards which offer cashback up to 5% at leading fuel stations as well as fuel surcharge waivers. The cashback on credit/ debit card on fuel purchase gained momentum after the demonetization. These specialised credit cards are called fuel cards and it is aimed to help you save money every time you refill your vehicle at the fuel station.
There are many banks who offer co-branded fuel credit cards in partnership with oil companies. The benefits that you receive on your fuel purchase can be in a form of reward points, cashbacks, discount or a combination of all three. Some examples of fuel cards in India are ICICI Bank HPCL Credit Card, BPCL SBI Credit card, Standard Chartered Super Value Titanium Credit Card and HDFC All Miles Credit Card.
Other ways to save diesel cost
We know that diesel prices getting higher but there are ways of saving expenditure on diesel. Here are a few of them:
Servicing your car regularly: This is by far the easiest way to save frequent trips to the fuel station. Depending on the model and brand of your car, get it serviced at regular intervals. This ensures engine efficiency and a good engine always consumes less fuel.
Combining trips: Try to skip car trips for distances less than 2 km. You can also plan and combine your trips so as to save fuel.
Electric cars: India is at the developing stage when it comes to Electric cars. However, taking inspiration from the west, Indians are warming up to this idea. According to a Bangalore-based Electric Vehicle Company, in the next five years, India will have 10,000 electric cars and buses. Electric cars are easy to own and maintain than fuel-driven cars. According to experts, the maintenance cost is under one rupee per kilometre on an electric car compared to four to five rupees on a diesel vehicle.
Car Pooling: A lot of fuel cost and fuel emission can be saved if there is the carpooling option. If you are When travelling to work, coordinate with a few of your colleagues, and take turns driving. It not only saves time but it also lessens the burden of your pocket. Carpooling is a solution to multiple problems like pollution, traffic and rising fuel costs.
Cycle to work: Many cities have companies that promote cycling to work. There are specialised cycles which are not on the lift but trendy to sport as well. Cycling to work will reduce your dependence on fuel emitted cars, reduce pollution and it is also very good for your health.
Ridesharing: Most of the cabs operating in India like OLA and Uber have share cab option which is an on-demand service and can be booked instantaneously through iOS or Android app. This service allows commuters travelling in the same direction to share a ride.
Frequently asked questions
(1) What is the Dynamic Pricing Model?
As per the Dynamic Pricing Model, the petrol price is calculated on a daily basis instead of a fortnightly basis. The rates will change at 6 am daily, based on the change in the previous day’s cost.
(2) Where can I check the daily rates of petrol?
The daily rate of petrol can be accessed through Apps or SMS service or on the website of public sector oil providers like Indian Oil.
(3) What are various taxes levied on the diesel prices?
The various taxes levied on petrol prices are the Central Excise Duty at Rs 15.33 per litre and the VAT at 20% in Haryana.
(4) What will be the impact of GST on diesel prices?
Diesel prices are outside the range of GST; however, it may be included in the future along with the VAT.
(5) How can I save money on diesel?
Fuel credit cards can help you save money on diesel. It offers cashback and waivers on fuel surcharges and alternative travelling methods like servicing your car regularly, carpooling, electric cars or cycling to work.