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Petrol Price In Coimbatore

04 April 2020

Date

Petrol Prices

Change

  • 2020-04-04

    ₹ 72.63 /L

  • 2020-04-03

    ₹ 72.63 /L

  • 2020-04-02

    ₹ 72.63 /L

  • 2020-04-01

    ₹ 72.63 /L

  • 2020-03-31

    ₹ 72.63 /L

  • 2020-03-30

    ₹ 72.63 /L

  • 2020-03-29

    ₹ 72.63 /L

  • 2020-03-28

    ₹ 72.63 /L

  • 2020-03-27

    ₹ 72.63 /L

  • 2020-03-26

    ₹ 72.63 /L

  • 2020-03-25

    ₹ 72.63 /L

  • 2020-03-24

    ₹ 72.63 /L

  • 2020-03-23

    ₹ 72.63 /L

  • 2020-03-22

    ₹ 72.63 /L

  • 2020-03-21

    ₹ 72.63 /L

  • 2020-03-20

    ₹ 72.63 /L

  • 2020-03-19

    ₹ 72.63 /L

  • 2020-03-18

    ₹ 72.63 /L

  • 2020-03-17

    ₹ 72.63 /L

  • 2020-03-16

    ₹ 72.63 /L

  • 2020-03-15

    ₹ 72.80 /L

  • 2020-03-14

    ₹ 72.93 /L

  • 2020-03-13

    ₹ 73.06 /L

  • 2020-03-12

    ₹ 73.21 /L

  • 2020-03-11

    ₹ 73.68 /L

Petrol Prices in Coimbatore

Coimbatore is one of the largest metropolises of South India. The city has over 30000 small, medium, large scale industries and textile mills. Known for motor pump manufacturing the city has a strong economy and industrial set-up. It is also one of the major gold jewellery manufacturing hubs in India. Apart from being an industrial city, it is also popular for educational institutions and agricultural occupation. The common languages spoken in the city are Tamil, Telugu, Malayalam, Hindi and English. Not surprisingly the city has a 73% literacy rate.

Coimbatore is a scenic city surrounded by hills. It is known for its south Indian delicacies and silk industry – particularly the Banaras and Kanchivaram saris. Tourists flock to the city for a stop-over on the way to or from Ooty or Munnar both hill stations in south India. The most preferred activity is shopping for the local produce such as silk cloth, saris, coffee, tea and spices.

Transport infrastructure in Coimbatore

Coimbatore has a well-developed public transport system with busses, auto-rickshaws and taxis plying the road. There also exists a good network of busses plying to nearby cities like Chennai, Madurai, and Tirunelveli as well as to the neighbouring states of Kerala and Karnataka.

The infrastructure that supports the transport network is also fairly well developed and there are plans afoot for further improvement to cater to the varied demands of tourists that flock to the city during the holiday season.

The thriving tourism and the demands of the locals for better transport as well as the increasing number of privately owned vehicles are together impacting the price of petrol within the city. The price per litre has risen by INR 5 in the past 6 months alone.

Why are petrol rates so high in Coimbatore?

One of the major factors affecting the price of petrol in the city of Coimbatore is the growing demand. The city is a popular tourist destination and a hub for travel in southern India. As tourists – both locals and foreigners – flock to the city, they need and demand transportation around the city as well as to nearby cities and towns. Besides, the new generation in India demands the luxury of owning a vehicle. All this generates a heavy demand for petrol.

On the other hand, the need to import petrol from the OPEC, the fluctuations in the price of crude oil as well as currency exchange rates, and other international factors that impact the petrol supply chain, limit the supply of the product.

The disparity in the demand and supply of petrol, hikes up the price, not just in Coimbatore but other Indian cities too. State taxes and charges further add to the cost.

Pricing mechanism of petrol in India

Pricing for any product is determined by the forces of demand and supply. However, these are not the only factors that impact price. Let us take a look at other factors that impact the price of petrol in India.

  • Fuel component
  • Customs Duty
  • Excise Duty
  • Sales VAT
  • Dealer Commission

The retail selling price (RSP) of petrol is computed based on import parity and export parity. Put simply this means that the retail price – the price per litre you pay to buy petrol - is determined by the ratio of crude oil imported to that of crude oil exported. Currently the ratio stands at 80:20 which means 80% Import parity and 20% export parity.

Import parity is the price that the importers of crude oil pay for having crude oil in their depots. It comprises of the price of crude oil, the ocean freight, shipping insurance, custom duties, and dock charges. It also includes transportation from the dock to the depot.

Export Parity Price (EPP) is the price that oil companies receive for petroleum products. It includes the free on boarding price – which comprises of ocean freight, freight insurance, custom duties, and dock charges – as well as the advance license benefit for duty free import of crude oil.

Critics argue against this method claiming that since the de-control of petrol price in 2010, the prices should be based on market forces of demand and supply as well as pricing structure of those involved in the production of petrol. This includes refineries, petrol retailers, logistics companies, and others. The pricing according to those against the parity system should be based on cost + profit margin.

Components of petrol prices in Coimbatore

Petrol prices are made up of various components. Here they are in a nutshell -

International price of crude oil:

The demand and supply of crude oil in the international market is highly volatile. The frequent fluctuations in the price of oil – which is the raw material for production of petrol – directly impacts the price of petrol.

Currency Exchange Rate:

Since crude oil must be imported from the OPEC, the rate of currency exchange – which changes every day – also impacts the price of petrol.

Taxes:

Both central and state taxes are levied on petrol. VAT in Coimbatore has remained constant for a long time as has excise duty. These two liens are imposed on the price of petrol in Coimbatore.

Custom Duty and Dock Charges

Custom duty and port charges further add to the price of petrol. These charges vary from port to port.

Refineries Administrative Cost

After crude oil is received at the refinery it is processed to produce petrol. The refinery incurs some expenses to do this which includes not just the cost of the equipment and machinery required but also the administrative cost of running an office. They also add their profit margin to the price of petrol when sending it to the dealer or pump station.

Dealer’s commission

Every dealer adds his own profit margin to the price at which he purchases the petrol from the refinery. If there is a distributor involved, the price is further loaded by the distributor’s commission.

Petrol price in Coimbatore as compared to other cities

The price of petrol is low as compared to other major Indian cities, primarily because of the low percentage of VAT still levied in the state of Tamil Nadu. The state authorities have not revised the VAT for a considerable time. Mumbai has the highest per litre price of petrol, followed closely by Delhi. Chandigarh claims to have the lowest per litre price of petrol.

Earlier prices of petrol were computed every fortnight all over the country. Government owned companies like IOL and HPCL followed this fortnightly pricing model. Every alternate week, the factors that impact the price of petrol were added up to determine the per litre cost of the fuel. Petrol was then sold to retailers and distributors at this new price. Since 2016, the government has adopted the dynamic pricing model under which the price computation is done on a daily basis. Each oil company is required to declare the newly computed price of petrol on its website at 6 AM every day.

This model was adopted to pass on the benefit or loss due to fluctuation in the price of crude oil to the end user immediately. The new model has also brought about transparency in the pricing discouraging malpractices such as hoarding and hidden costs. You can determine the daily price of petrol either on the internet or through one of the following channels -

1) Mobile Application : Most oil companies have their own mobile app so if you favour one or the other, simply download the app on your Android, iOS, or Windows phone and check the price in the app.

2) SMS Services : Send an SMS to the designated number of your favourite oil company – type in RSP Dealer Code – to get the latest price as an SMS on your phone. Dealer codes are prominently displayed at all pumping stations. If you cannot find it, just ask.

3) Online Portals : As mentioned earlier, every oil company posts the price of petrol on their website every day at 6 AM. You can simply visit the official website of any company to see the petrol price per litre for the day.

Note: Petrol prices may vary slightly from company to company and dealer to dealer because of varying commissions and profit margins.

Benefits of Dynamic fuel pricing

The dynamic fuel pricing method has certain distinct advantages –

1. The model passes on any benefit of reduction in the price of crude oil to the end user immediately.

2. The model brings complete transparency in the pricing of petrol and petroleum products.

3. The model discourages malpractices such as hoarding and hidden costing.

4. It has curbed the speculation with respect to oil and petrol prices.

5. The new dynamic model brings relief to the oil companies as the burden of increase in price of crude oil is immediately passed on to the consumer.

GST and petrol prices in Coimbatore

India has yet to impose GST on petroleum products. Experts are of the opinion that levying GST will bring further uniformity in the pricing across the country since petrol will then not be subject to varying state taxes and VAT.

Diesel prices in Coimbatore

Similar to petrol, fluctuations in the price of crude oil also impact the price of diesel. Both price of petrol as well as that of diesel have shown an upward trend in recent times.

Cash backs on fuel cards

Customers experience some relief as they can avail cash back on fuel cards offered by several banks in India – both from the public as well as the private sector. This rebate comes in the form of waiver of surcharge applied on the per litre price of petrol. The percentage of rebate varies from bank to bank but generally falls within the range of 2.5 to 5%. Since the offers are at the sole discretion of the banks they are subject to change without notice.

Some ways to save petrol cost

Here are some ways in which you can save on petrol expenses -

Use of Public Transport:

Most Indian cities have a well-developed public transport system. There is also a network of busses and trains that ply from one city to another and one state to another. Using these facilities is much less expensive than using your own vehicle. It is also less exhausting.

Installing CNG:

Compressed Natural Gas (CNG) is a less expensive alternative to petrol. Not all vehicles can run on CNG so when you decide to make a purchase, consider the cost of fuel along with other factors.

Drive at moderate speed:

The faster you drive the more petrol your car – or other vehicle – will burn. Not only is this an expensive exercise it is disruptive and dangerous too not to mention the possibility of spending a night or two behind bars. It is advisable to drive at a sedate and safe pace.

Car-pooling:

If you and your neighbour travel to the same location for work why not alternate vehicles? It will give you companionship during the drive and save you pretty penny as well. If time co-ordination is a problem, just hop on to one of the app based shuttles – it will definitely work out cheaper since you split the cost with co-passengers.

Frequently asked questions

Here are some ways in which you can save on petrol expenses -

(1) Do we have Dynamic Fuel Pricing Mechanism in Coimbatore?

Yes. Like the rest of the country, Coimbatore too follows the dynamic pricing model to determine the price of petrol.

(2) What is the best way through which I can check the daily rates of petrol?

Oil marketing companies flash the daily price of petrol on their respective apps and website. You can also send an SMS to the designated number of any oil marketing company to get the per litre price of petrol.

(3) Why do petrol prices vary from country to country when the price of crude oil sold by OPEC is the same?

  • Currency exchange rate
  • Local Government regulations
  • Market forces
  • Availability of crude oil vs. demand

(4) Why is petrol costlier than diesel?

The Indian Government offers better subsidy on diesel in an effort to uplift the lower strata of society. It is for this reason that the price of diesel is comparatively less than that of petrol although both are made from crude oil.

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