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Petrol Price In Gurgaon

04 April 2020


Petrol Prices


  • 2020-04-04

    ₹ 70.19 /L

  • 2020-04-03

    ₹ 70.19 /L

  • 2020-04-02

    ₹ 70.19 /L

  • 2020-04-01

    ₹ 70.19 /L

  • 2020-03-31

    ₹ 70.19 /L

  • 2020-03-30

    ₹ 70.19 /L

  • 2020-03-29

    ₹ 70.19 /L

  • 2020-03-28

    ₹ 70.19 /L

  • 2020-03-27

    ₹ 70.19 /L

  • 2020-03-26

    ₹ 70.19 /L

  • 2020-03-25

    ₹ 70.19 /L

  • 2020-03-24

    ₹ 70.19 /L

  • 2020-03-23

    ₹ 70.19 /L

  • 2020-03-22

    ₹ 70.19 /L

  • 2020-03-21

    ₹ 70.19 /L

  • 2020-03-20

    ₹ 70.19 /L

  • 2020-03-19

    ₹ 70.19 /L

  • 2020-03-18

    ₹ 70.19 /L

  • 2020-03-17

    ₹ 70.19 /L

  • 2020-03-16

    ₹ 70.19 /L

  • 2020-03-15

    ₹ 70.32 /L

  • 2020-03-14

    ₹ 70.38 /L

  • 2020-03-13

    ₹ 70.51 /L

  • 2020-03-12

    ₹ 70.62 /L

  • 2020-03-11

    ₹ 70.98 /L

Petrol Price in Gurgaon

Gurgaon is referred to as the Satellite city of Delhi, it is located in the northwestern part of Haryana. It is considered part of the National capital region, and it is also the hub for BPO industries. It was recently rechristened as Gurugram. The city has become a hub for MNCs and has a slew of malls. The immigrant population has been on a consistent rise since the advent of outsourcing business in India. This has resulted in better standards of living, higher disposable income and varied job opportunities. The improved economic status has translated in to increased number of aspirational buys including high-end bikes, cars and motor vehicles. While this has led to increased carbon footprint and pollution, it has also increased the demand for petrol and diesel. Thus, the petrol prices have been on the rise and has been a cause of concern for many months now.

Pricing mechanism of petrol in Gurgaon

The dynamic fuel pricing mechanism was introduced by the Government in June 2017. This mechanism replaces the earlier pricing mechanism which allowed the OMCs (oil marketing companies) to revise the petrol and diesel prices on a fortnightly basis. The OMCs incurred substantial losses due to their inability to pass on the cost squeeze to the end user on a proactive basis. The Government had to intervene from time – to – time to extend subsidy and relief to OMCs to ensure that they operated within acceptable margins. The dynamic fuel pricing mechanism allows the OMCs to revise their petrol and diesel prices on a daily basis to reflect the International cost pressures. This mechanism promotes better transparency for fuel pricing. This method is followed by developed nations and promotes free trade economy. Gurgaon, along with the rest of India adapted this mechanism as of June, 2017.

Features of dynamic fuel pricing mechanism

  • Petrol and diesel prices are revised by OMCs every day at 6 A.M, the same is available for public consumption immediately

  • Tech-enabled petrol pumps automatically revise the petrol prices and use the new price for calculating the petrol and diesel disbursement

  • If the petrol pump is not automated, then there is a need for manual intervention

  • This system reduces the working capital reserve for conducting day-to-day activities and improves inventory management system

  • The macro economic factors which cause the margin squeeze for OMCs are immediately passed on to the end user, thereby cutting the stress on the financials of the companies.

Factors influencing petrol prices in Gurgaon

Petrol prices are ascertained after aggregating various costs and margins applicable. Some of the costs pertain to international factors and some of them are local in nature. All the factors are computed and attributed to the refined product and the pricing per litre is arrived at accordingly. Two of the major influencers for petrol and diesel prices are Crude oil price which is the raw material for the end product and currency exchange rates. The local factors do have a subtle influence on the petrol prices, among the local factors, the taxes levied have a larger role to play.

International factors –

Crude oil prices– Crude oil is the basic raw material required for manufacturing the end product petrol and diesel. The refining process for these two end products is entirely different. Petrol undergoes a far more complex refining process as compared to that of diesel. Every barrel contains 159 litres or 42 US gallons of crude oil, as of today the per barrel cost is $79.61 (22 October, 2018). The OPEC nations which are the primary exporters of crude oil announced production cuts at the start of the year. Thus, the crude prices have been on the rise over the past 10 months. This has greatly influenced the petrol and diesel pricing.

Currency exchange rates– Crude oil is an imported commodity; hence, the settlement has to be made in US Dollars. The dollar has been strengthening against the rupee which means that the OMCs have to shell out more funds as procurement cost. The increase in outflow has resulted in tightening of gross profit margins for the OMCs. However, with the dynamic fuel pricing mechanism the OMCs are now able to pass on the cost squeeze immediately to the end user.

Local factors –

Operating and marketing costs– All the costs involved in transportation, refinement and distribution of petrol may be considered as local factors. Depending on the demand – supply dynamics, demographic spread and transport infrastructure, the costs could vary across cities. Gurgaon is a well-connected city with availability of labor at cheaper rates, hence, the influence of this factor is minimal.

Excise duty and VAT– The petrol price comprises of levies by Central and State Government. Over 50% of the retail selling price comprises of excise duty which is levied by Central Government. The excise duty is applied at Rs. 19.48 per litre. On diesel, it was Rs.15.33 per litre. The local tax levied by Haryana Government on petrol amounts to 26.25%. and on diesel amounts to 17.22%.

Dealers commission– The dealers charge a commission of 7% per litre of petrol, this could vary across cities depending on logistics and demand – supply dynamics.

Components that determine the petrol prices in Gurgaon

The petrol price in Gurgaon is determined as an aggregate of various cost centers. The various cost centers which form a part of the petrol pricing include –

Free on-board –The purchase price of crude oil from overseas dealers by Indian oil marketing companies (OMCs) is termed as free on-board price. In simple terms it is the sum total of crude oil price and dealer commission converted to local currency using the latest exchange rate applicable.

Customs duty– Customs duty is applicable on all items that are imported into India. Crude is one of the largest import commodities in India. The Central Government levies relevant % as customs duty on various commodities. The current customs duty on crude oil is 15.5% with 10% being the basic customs duty and 5% integrated goods and services tax. This customs duty is applicable on crude oil.

Import parity price– IPP is the aggregate of import charges, duty and freight costs – this is paid by the Indian OMCs at the Indian port.

Refinery transfer price –The refineries process the crude oil and create the desired end product, namely petrol and diesel. The refineries transfer the end product to the petrol pumps of the OMCs for distribution among end user. This price paid by OMCs to refineries for transferring the petrol and diesel to respective petrol pumps of OMCs is termed as refinery transfer price.

Inland transportation– The transportation cost of petrol and diesel to retail outlets is termed as inland freights which is paid by the OMCs to the transport facility hired for distribution among retail outlets.

Depot price –The retail outlet owners pay per litre price on the petrol or diesel purchased from oil marketing companies. This is termed as depot price. Often, the retail outlets may belong to the oil marketing companies, in which case there would be a segment or departmental charge transferred and would be treated as inter-department or inter-subsidiary transfer.

Import charges– There are more nuances to importing commodities from overseas, the insurance charges, port dues and ocean losses due to pilferage etc., (if any) is aggregated as import charges. The premium paid to the insurance provider for obtaining a hedge against the commodity imported is termed as insurance charges. Port charges refer to the charges levied on importing company for using the port facility for temporary stocking of commodity.

The retail selling price of petrol and diesel in Gurgaon is the sum total of all the mentioned cost centers. Apart from these costs, there are levies by Central and State Government which are included to ascertain the price per litre of petrol and diesel.

Petrol prices in Gurgaon as compared to other cities

The petrol price per litre in Gurgaon is Rs. 80.09 as of 23 October, 2018, the petrol prices have hovered around these levels over the past 15 sessions. Gurgaon witnessed petrol prices peak in September, 2018 with petrol price per litre at Rs. 83.83. The Government briefly intervened to provide relief to the end user, by cutting the price per litre of petrol by Rs. 2. However, with the macro economic factors, looking weak, the experts are of the view that the relief is likely to be short lived. The rest of the year could remain stressful in terms of petrol and diesel prices.

Frequently asked questions about petrol prices in Gurgaon

  1. How are petrol prices in Gurgaon calculated?

The retail selling price of petrol in Gurgaon is the aggregate of crude oil cost, taxes (Excise duty and VAT), refinery transfer price and OMC expenses. This amount is added along with the margins on the product. This would become the petrol price applicable for the particular retail outlet.

  1. Why is there price difference between per litre cost of petrol and diesel in Gurgaon?

The state levies or VAT on diesel is 17.22% and petrol is 26.25%, this is one of the primary reasons. Apart from this the refinement process for both the end commodities is different. The process is more complex in the case of Petrol, thereby the cost incurred is higher. This is yet another factor which influences the price of petrol and diesel.

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