Let’s make a comparative study of diesel prices in Telangana by considering the three prime cities, which include Hyderabad, the capital city, Warangal and Karimnagar. In Hyderabad, during the first two weeks of November 2017, the fuel rate moved in an increasing trend. On the opening day of October 2017, the fuel price was Rs.64.02 per litre, which diminished to Rs.61.79 per litre on the closing day of the month. The highest and lowest rates in the month were Rs.64.25 per litre and Rs.61.79 respectively. Refer the following table:
Historical Diesel Prices in Hyderabad 2017(Price per litre)
| September | August | July | June | |
| Opening day price | Rs.62.06 | Rs.60.38 | Rs.58.08 | Rs.58.72 |
| Closing day price | Rs.63.95 | Rs.61.98 | Rs.60.45 | Rs.58.17 |
| Highest rate | Rs.64.00 | Rs.62.35 | Rs.60.45 | Rs.58.72 |
| Lowest rate | Rs.62,02 | Rs.60.38 | Rs.58.08 | Rs.58.17 |
Trend in Diesel Price in Telangana between January 2018 and March 2018
| January | February | March | |
| Opening date price | Rs.64.92 a litre | Rs.69.63 a litre | Rs.67.68 a litre |
| Closing date price | Rs.69.53 a litre | Rs.67.50 a litre | Rs.69.97 a litre |
| Highest rate | Rs.69.53 a litre registered on 31st | Rs.69.75 a litre registered on 6th and 7th | Rs.69.97 a litre registered on 31st |
| Lowest rate | Rs.64.92 a litre recorded on 1st | Rs.67.49 a litre registered on 25th | Rs.67.68 a litre registered on 1st |
| Trend | Upward | Downward | Upward |
| %Change | +7.13% | -3.05% | +3.38% |
Trend in Diesel Price in Telangana in January 2018
- You can notice a price difference of 12 paise a litre between the diesel rates offered in Hyderabad, the capital city of Telangana; and Warangal, the second biggest city in Telangana.
- To make it clear, the city of Hyderabad offered a price range of Rs.64.92 a litre on 1st January whereas the city of Warangal offered a price range of Rs.64.80 a litre on the same date.
- The disparities in the price offers may be ascribed to voyage expenses, which tend to change within the cities of the same state.
- Apart from voyage expenses, other cost components like crude oil costs, taxes, pollution cess, the profit ratio and expenses of Oil Marketing Companies will have a direct impact on fuel prices.
- In January 2018, no cost elements were projected to revise except crude oil costs, which are affected by climate conditions, the current and expected demand for crude oil, etc.
- Crude oil sustained a reasonable amount of demand this month and thus, the commodity accumulated the price.
- By the end of the month, a 7.13% rise in the diesel rate across the state was declared by Indian Oil Corporations Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited.
Trend in Diesel Price in Telangana in February 2018
- The price offer was released at Rs.69.63 a litre in Hyderabad on 1st February. It stood at Rs.69.48 a litre in Warangal. No major price difference was observed even though Arun Jaitley, Finance Minister, unveiled the budget for the financial year 2018-2019.
- A price fall in diesel prices was anticipated by fuel consumers. Fuel prices were not impacted since the finance minister made no changes in the tax slab for diesel.
- In fact, you can see the diesel rate moving upwards during the first 6-7 days. After that, it moved downwards because of the fluctuations in the exchange rate.
- In February 2018, you can observe a 3.05% downfall primarily due to crude oil costs, which fell by a big margin in the month.
- The demand pattern plays a vital role in fixing the price for unrefined oil. There was a steep fall in the demand for the commodity.
- Thus, unlike the previous month, diesel rates in all towns of Telangana were down this month. Other states such as Maharashtra, Karnataka, Uttar Pradesh and Madhya Pradesh have also produced the same result.
Trend in Diesel Price in Telangana in March 2018
- Whenever the Central Government reduces the excise duty, OMCs will also reduce the fuel price. If the government increases the central tax, OMCs will increase the diesel rate accordingly.
- The excise duty in the quarter was retained unaltered at Rs.15.33 on diesel per litre. Similarly, the State Government of Telangana levied the Value-added Tax (VAT) at 25.93%.
- It can be inferred that the domestic factors have no impact on a 7.77% rise in the diesel rate between January 2018 and March 2018. It was caused by the accelerated crude oil rates and a devalued USD.
- In March, the highest fuel rate was booked at Rs.69.97 a litre. It was also the highest rate for the entire three months.
- The lowest diesel rate stood at Rs.64.92 a litre for the month of January, Rs.67.49 a litre for the month of February, and Rs.67.68 a litre for the month of March.
How are Diesel Rates in Telangana Computed?
The following table illustrates the Price Structure of Diesel in Telangana:
| Diesel Price | |
| Crude Oil Prices including freight | XXXX |
| Crude Oil Cost per litre | XXXX |
| OMC overheads | XXXX |
| Refinery Transfer Price and processing overheads | XXXX |
| Transportation costs, OMC margin, freight | XXXX |
| Fuel Price after Refining | XXXX |
| The Central Tax on Diesel (Excise Duty) | 15.33 per litre as on 4 October 2017 |
| Price charged to dealers before Value-added Tax | XXXX |
| Dealer retail cost calculation | XXXX |
| Commission charged by dealers | XXXX |
| VAT 27% and 25p pollution cess | XXXX |
| Retail Selling Price of Diesel per litre | XXXX |
Components of Diesel Costs in Telangana
The following are the components of Diesel Rates in Telangana:
- The cost of crude oil is paid by OMCs.
- Refinery Transfer Price (RTP) is charged by refineries.
- Diesel is taxed by the state and central governments.
- OMCs add their profit margin to the total overheads incurred by them.
- Dealers charge commission for supplying the fuel to end customers.