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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 Surat
04 April 2020
₹ 67.06 /L
₹ 67.21 /L
₹ 67.33 /L
₹ 67.46 /L
₹ 67.59 /L
₹ 68.02 /L
Surat is known for diamonds and jewelry trading. With the growing
opportunities and better disposable income, the number of vehicles in Surat
have seen a drastic growth. As of 2017-2018, the total number of registered
vehicles in Surat amount to 23.28 million. The diamond city has seen a rise
in the number of cars, there has been a substantial increase in motor
cycles and scooters. Although the city is well connected by public
transport system, it does not seem to cater to a majority of the
population. More people use private vehicles to travel across the city. The
increase in number of vehicles has resulted in higher demand for petrol and
diesel. The petrol prices across the nation has been on an upward spiral
influenced by multiple factors.
Petrol remains the basic commodity used for transportation, however, the
supply cannot be indigenously matched with the demand dynamics. Crude oil
is an imported commodity and the supply of this raw material influences the
petrol availability in Surat (and rest of India). The crude oil prices are
on a rise and the exchange rates are unfavorable which has severe
fluctuations of petrol prices in Surat. The petrol prices have been on the
rise over the past 10 months. There was only temporary relief which was
influenced by the Government intervention to reduce the prices to provide a
breather to the end user. The petrol price as of 22 October 2018 is Rs.
78.79 per litre, over the past 10 sessions the price has lingered around
the same levels. The prices in September 2018 peaked at Rs. 83.01 per
litre, the prices have tapered off since. Experts believe that the macro
economic factors continue to remain unfavorable and hence, the relief may
only be temporary.
There are multiple factors which affect the petrol prices in Surat. They
can be broadly classified as international factors and local factors. The
international factors tend to have a more severe impact on the pricing of
fuel as compared to that of local factors. Below is a brief understanding
of the various factors which influence the petrol pricing in India –
Crude oil prices – Crude oil is the primary raw material used for petrol
and diesel. They undergo varied refining process; the cos of crude oil is
quoted per barrel. 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
crude oil prices have been on the rise since the onset of 2018, primarily
due to the production cuts announced by OPEC nations. Crude oil is an
imported commodity and is procured from OPEC nations which have crude
reserves in abundance. The brewing tensions across the OPEC nations and USA
has influenced the crude productions which in turn have a ripple effect on
the overall pricing of fuel across nations.
Currency exchange rates – Crude oil is an imported commodity, with the
growing demand the volume of crude oil imported by India has increased over
the past few years. Crude oil imports are settled in US dollars, the rupee
depreciation has impacted the cost of raw materials. There has been atleast
10% depreciation of rupee over the past 10 months, which has impacted the
cash outflow for raw material procurement for the OMCs. This has in turn
led to a sharp squeeze in gross profit margin.
Local factors :
Operating costs –The operating costs in terms of logistics, toll, labor cost for
transportation of raw materials from dealers to refineries and from
refineries to petrol pumps have a subtle impact on the pricing of the end
Marketing costs –There are multiple variants of petrol which are suitable for various types
of vehicles, there are premium petrol products which are marketed
aggressively to enhance the margins for the OMCs. The marketing costs are
in turn passed on to the end user.
Research and development costs – the increase in competition has enhanced the need for OMCs to develop
rich variants to the plain petroleum products. There is substantial amount
invested in R&D initiatives to develop various premium petrol products
and oils or lubricants for various types of vehicles. This cost also
becomes a component in pricing of petrol products.
Excise duty and VAT –The Central Government excise duty is consistent across all States, hence,
does not have any specific impact on individual State or city. The excise
duty is applied at Rs. 19.48 per litre. On diesel, it was Rs.15.33 per
litre. Gujarat Government or State Government is responsible for levying
VAT on petrol and diesel, hence this remains one of the leading causes for
price disparity among petrol and diesel price across various States in
India. Gujarat earlier used to charge 24% VAT on petrol and diesel and an
additional 4% cess. VAT was revised in January 2016 citing the fall in
International crude prices, VAT is now being charged at 20% plus the 4%
Dealer commission -The petrol and diesel dealers charge a commission of 7% on a litre of
petrol. This is dependent on the petrol price in the city, within the city
and across OMCs the dealer commission would be similar, but there could be
change across cities and States within India.
Along with the rest of India, Surat migrated to the dynamic fuel pricing
mechanism in June 2017, where the price of petrol and diesel would be
revised on a daily basis. Prior to this, the petrol and diesel prices would
be revised on a fortnightly basis. Dynamic pricing mechanism is followed by
most developed nations, it reduces the Government intervention and promotes
free trade economy. The benefits of dynamic fuel pricing are as listed
Increases transparency of fuel pricing and reduces Government
Reduces working capital reserve to conduct day-to-day activities by
Tech-enabled petrol pumps to reduce lead time due to revision of
fuel prices frequently
Promotes free trade economy
Interlinks the local petrol and diesel prices to international
crude oil prices
GST (Goods and Services Tax) and petrol prices in Surat
GST was levied to bring in uniformity of tax regime across States. This
would cut down the price parity pertaining to various goods and services
across the States. However, petrol and related fuel products have been kept
out of the ambit of GST, hence, there is no direct impact of GST on petrol
prices in Surat and rest of India.
The world is becoming more environmentally conscious, there is a need for
every individual to assess the carbon foot print that they would leave
behind. If there are ways to reduce the carbon footprint then effort should
be taken in this regard. Clearly, the carbon footprint from usage of fuel
(petrol / diesel / LNG) is quite high, hence, any approach to reduce the
usage should be sought by individuals. The reduction of petrol usage will
also prove to be beneficial on the purse strings. Some of the methods by
which one can save on petrol usage and cost are mentioned below –
Carpooling – Many individuals car pool with their colleagues or friends or
acquaintances to optimize on petrol usage. It also spares them the stress
of driving through the city traffic on an every day basis. The only
drawback in this arrangement is the syncing up of timings among all the
Cab sharing –Citing the importance of reducing costs for the end customer, cabs which
operate across Surat have launched the cab sharing service, where an
individual can book the service as per convenience. The cab will pick up
multiple individuals in the same cab and drop them off at their respective
destinations. The fare will be determined based on the distance travelled
by the individual independent of the rest of the journey.
Electric cars –Electric cars have been operating with a very small market share in India.
While they have proven to be efficient, the battery operated cars need more
charging points across Surat and other cities across India. Further, there
is a need to customize these cars to catch up with the challenges faced by
individuals who wade through the cities congested traffic.
Public transport –Using public transport could be a long-term solution to the problem.
However, for this the Government needs to take up initiatives to enhance
the transport infrastructure to catch up with the increasing demand. Many
cities have introduced Metro links within the city which are a convenient
means to travel, especially longer distances. Alternatively, buses and rai
options should be opted by individuals, this will help them reduce the
carbon foot print substantially, reduce stress levels and save petrol
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