CreditMantri Finserve Private Limited
4th Floor Sudhama, 36 Vijayaraghava Road,T Nagar, Chennai, Tamil Nadu 600017
Have any queries? Click here for more details
All written queries will be responded within 1 working day.
We'd love to help you through every step along the way.
Is your Credit Score >750?
Petrol price in India is revised every day after adapting to dynamic pricing mechanism. Get today’s latest updated petrol price in Petrol Price In Nagpur
08 April 2020
₹ 76.26 /L
₹ 75.25 /L
Dubbed Orange city because of its orange produce, Nagpur is an Indian
Metropolis. It lies within the state of Maharashtra on the Deccan Plateau
and is the winter capital of the state.
Nagpur has a well maintained network of roads which are kept decongested by
their very architecture. Connected to the four major Metropolitan cities of
India – Delhi, Mumbai, Chennai, and Kolkata – by road, air, and rail, the
city lies at the epicentre of the country. The most popular form of public
transport is auto rickshaws which ply in most parts of the city. Nagpur
also has a good network of public busses. Situated at the junction of two
major national highways - NH 7 from Kanyakumari to Varanasi and NH-6 from
Hajira to Kolkata – as well as two major Asian Highways – AH43 (Agra to
Matera, Sri Lanka) and AH46 (Kharakpur to Dhule) – the city witnesses
considerable traffic at all times of the day and night. The city is also
connected to Mumbai – the state capital – and other metros and cities of
India via a network of Highways and expressways. The upcoming NH-26B
(Savner-Chhindwara-Narsinghpur) will complete the connectivity of the city
by linking North India into the network of roadways passing through Nagpur.
Nagpur has a high demand for vehicle fuel – petrol and diesel – because of
its unique location and the fact that it is a hub where several national,
state, and Asian highways interconnect. This is one of the major factors
contributing to the high price of petrol in the city. Apart from the usual
factors such as fluctuation in price of crude oil and currency rates, the
unusually high demand for fuel is the biggest reason why the price of
petrol is nudging the 90 rupee mark. Here is a quick look at the prices in
Petrol is made from crude oil which India imports from the petroleum
manufacturing countries – the OPEC. These countries export oil not only to
India but also to other countries. The international forces of demand and
supply as well as the international political situation determine the price
of crude oil. This forms the basis of the pricing mechanism for petrol in
India also exports petrol to some countries. The price of petrol is
computed by a complex formula that assigns 80% weightage to Import parity –
that is to say 80% of the price comprises of import costs – and 20% to
Critics of this method of computation argue that extremely low weightage is
being given to revenue from exports. According to them, the price should be
determined by actual costs incurred by the refineries plus their profit
margin. They claim that the parity method worked well as long as the
industry was under government control. However after decontrol, the price
should be determined by natural market forces of a capitalist economy.
The price of any product is computed as the cost incurred in manufacturing
it plus the profit margin of the manufacturer. This price is loaded by the
cost of transportation, the profit margin of the distributor, and the
profit margin of the retailer. The pricing of petrol however, is somewhat
more complex because of the fact that the raw material required for
manufacture must be imported. Also the equipment required for manufacture
of petrol and diesel is expensive. Setting up retail outlets – pumping
stations – also requires heavy investment. These facts make the pricing of
petrol and diesel a complex process. Here are some of the components that
comprise the price of petrol –
FOB (Free Onboard Price) – the price paid by the oil companies to purchase
crude oil from importers.
Custom Duty – Tax imposed by the government on import of crude oil and
Import Parity Price (IPP) – the sum total of price and charges paid by the
oil companies at the port. It includes custom duty, freight, and port
Refinery Transfer Price – This is the price at which the OMC pays to the
refinery for purchasing petrol. It includes all the manufacturing costs of
petrol as well as inland freight.
Inland Freight: It is the cost of transporting oil from the refinery to the
Depot Price – The price that pumping stations pay to OMCs for petrol.
Freight – Once crude oil reaches the port it must be transferred to the
refineries. The cost incurred for this is called freight. It is added to
FOB together they comprise the cost and freight of oil.
Import Charges – The cost of importing oil includes freight insurance, port
dues, and ocean losses.
Excise Duty – A cess levied by the central government on import of petrol
and petroleum products including crude oil. Currently it stands at 19.48
VAT – Value Added Tax is imposed by state governments on sale of petrol. It
varies from state to state.
It is worth a mention that of all the factors that comprise the price of
petrol, nearly 45% consists of various taxes and cess levied by the
government. Statics show that this component has more than doubled in the
past 4 years alone. Since taxes are computed as a percentage of the value
of petrol, a hike in the price of petrol – or crude oil – means higher
Nagpur ranks among the costliest cities in India in terms of petrol price.
The price has shown a general upward trend with retail price per litre of
petrol hovering around INR 90 per liter. The price of petrol in orange city
ranks 49th at the national level and 30th at the
India has recently adopted the dynamic pricing model for petrol pricing.
Under this model oil companies compute the price of petrol every day and
post the daily price on their websites. There are other channels available
to learn the current price of petrol.
Every oil company has its own app which flashes the daily price of petrol.
If you prefer to purchase your fuel from a particular OMC, you can download
the respective app on your smart phone or iOS or Windows mobile to stay
updated. These apps are available on Google Play store and Apple store.
OMCs also offer a free SMS service by which they will message you the
retail price of your preferred pumping station. Simply type RSP followed by
a space and the dealer code of the pumping station to verify the price. The
dealer code is prominently displayed at pumping stations.
Each OMC posts the latest price of petrol on their website. They also offer
a lot more information with respect to fuel and its price.
The dynamic pricing model recently adopted by the government of India and
OMCs has several advantages –
It passes the benefit or burden of daily fluctuation in price of
crude oil to the consumer immediately.
It passes the effect of daily fluctuation in currency exchange rate
to the consumer on the same day.
It brings transparency into the pricing since OMCs are required to
post the daily price of fuel on their website and convey it to
their customers via other channels.
It discourages speculation, hoarding, and other malpractices.
Petrol and fuel remain unaffected by the recently introduced Goods and
Services Tax. These commodities therefore still labour under the
traditional sales tax, excise duty, and VAT. Nearly 50% of the petrol price
is comprised of tax. Community leaders are therefore pushing to bring fuel
under the purview of GST which they claim will stabilize the price of
Like petrol, diesel prices in Nagpur too show an upward trajectory. The
following table shows the recent trends in price of diesel and petrol in
Nagpur. The table shows data as on 13th October, 2018.
Difference in Petrol and Diesel Price
In an effort to support the Indian population – most of which hovers around
the poverty line – banks and other financial institutions have launched
fuel cards that offer users credit for purchase of fuel. User can also
avail waiver of surcharge or cash back of 5% on the price of petrol.
Looking at the steeply rising cost of fuel, the depleting oil reserves, and
the keen competition among nations to secure crude oil, it becomes
necessary to look for alternative methods to save on fuel expenditure.
Already popular in many western countries, Indians are gradually warming to
the idea of electric cars. The first Electric Vehicle Company has already
begun exploring options and experimenting with electric cars in Bangalore.
In the next 5 years India hopes to see many more electrically powered
vehicles plying the roads.
As businesses prosper so do their employees. Owning a vehicle is a
necessity rather than a luxury for the new generation. However the
viability of maintaining more than one vehicle per family has yet to be
seen. With the rising prices of petrol, not many can afford to drive to
work every day. Carpooling comes to their aid with app based cars running
point to point shuttles in several major cities. Also if you happen to be
travelling in the same direction as your neighbour, why not share a car?
Cycle to Work
Do you visit the gym after work? You can save yourself a pretty penny not
only in terms of gym fees but also petrol prices. Cycling to work - if you
live close enough that is – is a great alternative to your daily gym – and
it is cost effective too.
(1) What is the Dynamic Pricing Model?
The dynamic pricing model is a recently adopted model for computation of
petrol prices. The price under this new model is computed daily as against
the traditional fortnightly computation.
(3) What are various taxes levied on the petrol prices?
The central government levies excise duty at 19.48 per litre on petrol. The
state government levies VAT or value added tax. Currently VAT is levied at
26% in Maharashtra.
(4) What will be the impact of GST on petrol prices?
If fuel is brought under the purview of GST, there will be considerable
drop in the price of petrol. Currently excise duty at 19.48 per litre and
VAT as determined by the various state governments is levied on petrol.
Once it comes under the purview of GST, the only tax applicable would be
Get low interest loans & Lifetime FREE credit cards
Get customized Credit Health Report
Improve your creditworthiness
CreditMantri will never ask you to make a payment anywhere outside the secure CreditMantri website. DO NOT make payment to any other bank account or wallet or divulge your bank/card details to fraudsters and imposters claiming to be operating on our behalf.