Diesel Price in Karnal

The city of Karnal is situated in the State of Haryana and is popularly referred to as the ‘Rice Bowl of India’. The city has a rich history famous for its fort as the citadel can still be seen in the form of Kot Mohalla. Present day Karnal is famous for manufacturing agricultural implements and its parts with more than 40% of India’s agricultural implements and spares manufactured in the city.

Karnal is well connected through rail, air, and road to major cities of India. The city is centrally located between Delhi and Chandigarh on the National Highway No.1. The district of Karnal spreads over 2,520 sq. km with a population of nearly 15 lakh. Recently, under Prime Minister Narendra Modi’s Smart Cities Mission, Karnal was selected as one of the cities to be developed as a smart city. Transportation in Karnal largely depends on fuel to aid its economy as well as for public transportation.

Oil-marketing companies (OMCs) such as Indian Oil Corporation Limited (IOC), Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited (BPCL) operate in the city of Karnal. The diesel price in the city is largely similar across OMCs but with a slight difference due to transportation costs and the brand.

The diesel price in Karnal includes multiple factors which attribute to the retail price of fuel which we pay to the fuel station dealer. International and domestic factors influence the current diesel price in Karnal. Let’s look at the factors in detail to understand how the diesel price in Karnal is calculated.

International and Domestic Factors Affecting the Diesel Price in Karnal

India purchases crude oil in the global market which is refined and then sold to end consumers. The global crude oil price fluctuates with any changes in the demand or supply as well as due to geopolitical tensions if any. The domestic factors include taxes levied by the Central and the State Government. While the Centre levies excise duty charges, the State implies the Value Added Tax (VAT) on diesel. Also, the OMCs add their profit margins, while dealers charge a commision.

Let’s understand each of the components in detail:

• International Crude Oil Price: As mentioned, India imports crude oil which is purchased through the Indian Basket price index. The Indian Basket or Indian Crude Basket price is an index of the crude oil import price to India. More than 70% of India’s crude oil is imported from oil-producing countries which are refined and then sold to fuel station dealers across the country. When there’s a surge in demand for the crude oil in the global market, the fuel prices increase accordingly.
• Tax on Diesel: Diesel attracts taxes levied by both the Central and the State government. The Centre charges Rs.15.33 per litre as excise duty on diesel, while the Haryana State government levies VAT at 17.22%. Both the taxes form the biggest domestic factor in determining the fuel price in Karnal.
• Exchange Rate of the US Dollar: India purchases crude oil in US dollars and thereby the price of the crude oil depends on the exchange rate of the USD over the INR. Crude oil prices are impacted by fluctuations in the exchange rate of the USD.
• Fluctuations in the Demand and Supply of Crude Oil: India depends on fuel for its transportation requirements. Any fluctuations in the demand and supply of crude oil will impact the diesel price in the country. Factors such as lagging imports, shortage of fuel inventory or issues at the refinery, directly impact the fuel price. Any instances of a shortage of supply of crude oil by the oil-producing countries, OMCs bid at a higher rate to purchase the unrefined oil leading to an increase in the diesel price.
• Dealer Commission & OMCs Profit Margin: OMCs purchase crude oil, refine and transport them to fuel stations across the country. The refined oil is sold to dealers after OMCs include their profit margin, which is one of the factors in determining diesel prices in India. Diesel and petrol dealers store, dispense fuel as well as maintain their fuel station, for which they levy a commission before its sold to the end consumer.

What is the Pricing Mechanism of Diesel in Karnal?

The diesel price in Karnal and other cities of India is revised under the mechanism of ‘dynamic fuel pricing’. The Government of India implemented the new pricing mechanism on 16 June 2017 as against the previous system for fuel, where fuel prices were revised every fortnight. Fortnight pricing mechanism avoided OMCs from revising the diesel price in the event of any increase or decrease in the global crude oil prices, hence, the dynamic pricing mechanism was introduced to offset any incline or decline in the prices of crude oil on a daily basis.

The current diesel price in Karnal is determined by the daily crude oil price in the international market and is revised daily at 6 a.m. Indian Standard Time (IST).

How to Check Daily Diesel Prices in Karnal?

Since the diesel price is revised on a daily basis in Karnal, it’s important to know the current diesel price in the city. There are multiple methods to track the fuel price in Karnal on a daily basis. OMCs have developed new methods to track the fuel price such as SMS service, mobile apps, as well as through their respective websites. The below process will help you to track the current diesel price in Karnal:

• Via Mobile App: With an increased use of smartphones and technologies, OMCs have developed mobile apps through which consumers can find out the daily diesel price in Karnal. HPCL customers can download MYHPCL mobile app, BPCL customers can utilise the SmartDrive app, while IOC customers can install the Fuel@IOC app to track the daily diesel price in Karnal.
• Through SMS Service: Customers can track the current diesel price in Karnal through SMS service as well. Follow the below SMS format to get the diesel price:
  • HPCL: SMS HPPRICE dealer code to 9222201122.
  • BPCL: SMS RSPdealer code to 9223112222.
  • IOC: SMS RSPdealer code to 9224992249.
• OMCs Website: OMCs update their website with the current diesel price in Karnal as well as other cities of India. The website also offers information of previous day’s fuel priced as well.

How Does GST Impact Diesel Price in Karnal?

Goods and service tax (GST) is the new taxation system for commodity trading and services. The new taxation system was implemented by the Central government effective from July 1, 2017. The GST is divided into five slabs - 0%, 5%, 12%,18% and 28%. However, petroleum products are exempted from GST but attract the Centre’s excise duty and the State’s VAT. Since the highest slab of GST is much lower than the taxes levied, it impacts the revenue of both the Central and State Government exchequer, hence, GST is not applicable to both petrol and diesel in India.