Jharkhand, the leading manufacturer of mineral wealth, has 26 districts and 260 blocks. The three major cities of the state include Ranchi, the capital city; Jamshedpur, the most populous city; and Dhanbad, the second most populous city in Jharkhand. During the first two weeks of November 20017, the diesel price has moved in a rising trend in Ranchi. On 1 November 2017, the fuel was priced at Rs.61.07 per litre that reached to Rs.61.67 per litre on 10 November 2017.
Trends in Diesel Pices in Ranchi (Last Five Months 2017)
| October | September | August | July | June | |
| Opening day | Rs.62.31 | Rs.60.44 | Rs.58.82 | Rs.56.58 | Rs.57.26 |
| Closing day | Rs.61.04 | Rs.60.25 | Rs.60.36 | Rs.58.85 | Rs.56.74 |
| Highest | Rs.62.54 | Rs.62.30 | Rs.60.71 | Rs.58.85 | Rs.57.26 |
| Lowest | Rs.60.17 | Rs.60.44 | Rs.58.82 | Rs.56.58 | Rs.56.74 |
In Ranchi, in October, the fuel price slashed by 2.08% whereas in September increased by 2.91%. In August, the fuel rate was up by 2.55% and by 3.86% in July. Since the introduction of dynamic fuel pricing in June, fuel prices were down in the second half. Over the last five months, the highest fuel price was Rs.62.30 per litre on 3 September and the lowest price was 56.58 per litre on 1 July. The excise duty was reduced by Rs.2 per litre on petrol and diesel. This was the major price cut during the same period.
Diesel Price in Jamshedpur and Dhanbad
| Diesel Price per litre Jamshedpur | Diesel Price per litre Dhanbad | |
| 1 April 2017 | Rs.59.29 | Rs.59.00 |
| 1 May 2017 | Rs.61.12 | Rs.60.82 |
| 1 June 2017 | Rs.59.76 | Rs.59.47 |
| 1 July 2017 | Rs.56.81 | Rs.56.54 |
| 1 August | Rs.59.06 | Rs.58.77 |
| 1 September | Rs.60.69 | Rs.60.39 |
| 1 October | Rs.62.56 | Rs.62.26 |
The fuel price in Jamshedpur was more compared to Dhanbad and Ranchi. It is inclusive of crude oil prices, taxes and dealer margins. According to the report released by Petroleum Planning and Analysis Cell (PPAC) on 4 October 2017, the local taxes levied on diesel and petrol in Jharkhand were 24.62% and 31.50% respectively. PPAC administers the subsidy on domestic LPG and PDS kerosene, and interprets the trends in overseas and domestic crude oil prices.
Dynamic Fuel Pricing
The current diesel price in Jharkhand is getting revised under the new fuel pricing system called dynamic fuel pricing. What is it? The system revises fuel prices on a daily basis in lieu of the earlier fortnightly revision. How is the revision done? Like the fortnightly revision, even the dynamic fuel pricing system, also called the daily revision, updates the diesel Costs on the basis of the variations in the INR/USD exchange rate and worldwide crude oil prices. This is the reason why the fuel is priced differently every day.
All diesel stations in Jharkhand will revise the price at 06:00 a.m. every day. The next day’s price is based on the trends in crude oil rates and the INR/USD exchange rate. Any variations in these two price determinants are replicated instantly in the retail selling price, which is charged to customers. Dynamic fuel pricing system has been in practice in India since 16 June 2017. Other nations that have adopted the system include Australia, Russia and the United States of America (USA). The daily revision system has many advantages over the previous fortnightly revision, which include:
- The system entrusts 100% transparency in fuel pricing
- Consumers are aligned with market performances
- Dealers face no difficulties as far as stock management is concerned
- Dealers/intermediaries and oil marketing companies can easily and effectively manage their working capital
Trend in Diesel Price in Jharkhand between January 2018 and March 2018
| January | February | March | |
| Opening date price | Rs.63.19 a litre | Rs.67.77 a litre | Rs.65.9 a litre |
| Closing date price | Rs.67.62 a litre | Rs.65.72 a litre | Rs.68.04 a litre |
| Highest price | Rs.67.65 a litre booked on 30th | Rs.67.88 a litre booked on 6th and 7th | Rs.68.04 a litre booked on 31st |
| Lowest price | Rs.63.19 a litre booked on 1st | Rs.65.65 a litre booked on 25th | Rs.65.09 a litre booked on 1st |
| Trend | Upward | Downward | Upward |
| %Change | +7.01% | -3.02% | +3.24% |
Trend in Diesel Price in Jharkhand in January 2018
- Fuel consumers can notice a minute change in the diesel prices in Ranchi, the capital city of Jharkhand, and Jamshedpur and Dhanbad because of the distance travelled from fuel supply centers to fuel retail centers.
- The OMCs will offer the Retail Selling Price of diesel considering the excise duty, the Value-added Tax, the profit margin and expenses of the OMCs, the commission remitted to dealers and pollution cess.
- As of 31st January 2018, in all regions of Jharkhand, the excise duty was charged at Rs.15.33 a litre and the VAT at 23.33%. The taxes are a major cost component and account for more than 45% of the market price.
- Under the dynamic fuel pricing framework, interestingly, the fuel cost persistently hiked until the closing day of the month as the crude oil market succeeded to hold the same level of demand in transnational markets.
- On 7th, the USD/INR conversion ratio declined Rs.63.35 and bounced back to Rs.63.53 on 14th. The exchange rate was depreciated to Rs.63.56 on 31st. Similarly, a steady incline was noted in the crude oil rate for Indian Basket.
- In the end, across the state, the fuel rate hiked by 7.01% buoyed by global aspects and not because of indigenous forces. The closing date price also turned out to be the highest price for January at Rs.67.65 a litre.
Trend in Diesel Price in Jharkhand in February 2018
- The Central Government’s budget, which was unveiled on 1st, was not in favor of diesel buyers who prolonged to pay the same offer.
- On the Foreign Exchange Market, the USD/INR currency pair was highly volatile and affected the fuel price movements to some extent across the month.
- Crude oil was also priced differently in sync with its demand and hence, the diesel price trekked both downwards and upwards in Ranchi, Jamshedpur, Dhanbad and other premier cities in Jharkhand.
- Indian Oil released the offer on 1st at Rs.67.77 per litre. The offer further upstretched to Rs.67.88 per litre on 6th. Until 25th, the fuel segment demonstrated a dwindling trend only because of overseas factors.
- It can be interpreted that a 3.02% breakdown in the diesel price was prompted by a 5.24% drop in the crude oil rate (Indian Basket).
- No variations were noted as far as domestic elements are concerned. Refinery activities at a global level were not affected. Bad weather reports and fabrication cuts were not announced in OPEC nations.
Trend in Diesel Price in March 2018 in Jharkhand
- Like January, the fuel accumulated its price by 18 paise a litre on 1st at Hindustan Petroleum, Bharat Petroleum and Indian Oil. Fuel rates were predicted to rise marginally by experts.
- Market experts also expected a steep fall in the USD/INR exchange rate based on the economics of the United States of America and India.
- As envisioned, the USD was undervalued to Rs.64.89 on 7th and Rs.64.85 on 14th correspondingly. Likewise, the first fortnight beheld a decent rise in crude oil costs (WTI and Brent).
- Thus, diesel was marketed at Rs.66.64 a litre on 6th and 7th , Rs.66.54 a litre on 12th, Rs.66.3 a litre on 17th , Rs.66.78 a litre on 24th , and Rs.68.04 a litre on 28th. A steady growth can be observed.
- Between January 2018 and March 2018, the highest and lowest prices were reported at Rs.68.04 a litre and Rs.63.19 a litre at all the three OMCs in India.
- A prime reason behind a 3.24% drop in the diesel rates in Jharkhand is the price of overseas unrefined oil, which was $67.06 a barrel in January, $63.54 a barrel in February and $63.80 a barrel in March.