Today's Petrol Price/Rate in Hyderabad

Under the new method, the petrol price in Hyderabad is revised daily by considering the 14-day average price of crude oil and the rupee-dollar exchange value. The new fuel price is effective from 6:00 am IST. State-run Oil Marketing Companies (OMCs) such as Indian Oil Corporation Ltd. (IOCL), Bharat Petroleum Ltd. (BPCL) and Hindustan Petroleum Corporation Ltd. (HPCL) fix the final selling price of petrol in Hyderabad.

Dynamic Fuel Pricing Meaning:

State-run oil firms consider the 14-days average price of the global crude oil prices as well as the rupee's exchange rate against the U.S. dollar under the Dynamic Fuel Pricing mechanism since oil prices are dynamic in nature. This is the reason why petrol prices in Hyderabad fluctuate daily. Under this mechanism, oil companies can offset any losses and pass on any benefits to the consumer.

The reason behind the move to revise fuel prices daily was aimed to pass on the benefit, even the smallest of the change to the customer as well as to dealers. Under the previous method, there were instances of sharp incline or decline in fuel prices, burdening consumers alike.

With the new pricing, oil companies can shield themselves from sudden leaps in fuel prices which is needed to be brought into effect at the end of a fortnight.

Components Affecting the Petrol Price in Hyderabad

The primary factors which affect the petrol price in Hyderabad are the global crude oil price and the rupee's exchange rate against the U.S. dollar. However, there are other components which determine the retail price of petrol in a city. These include freight charges, entry tax, refinery charges, oil companies' margin and logistics. Apart from these operational costs, the Centre levies excise duty, while the respective state government charges the local sales tax or Value Added Tax (VAT).

These charges are usually constant and are not dynamic like the crude oil price or the rupee-dollar exchange rate. Let's review the reasons why crude oil prices fluctuate.

1. Crude Oil Supply and Demand: Presently, the demand for crude oil in the international market is steady; however, it does fluctuate due to several factors. The Organisation of Petroleum Exporting Countries (OPEC) are the biggest suppliers of crude oil in the market, thereby influencing oil prices. Policies of the OPEC are influenced by any geopolitical developments, hence, any pressure on any of the member countries is bound to limit the supply, which leads to a rise in the prices of crude oil and vice versa.
2. Geopolitical Events: Geopolitics plays an important role in determining the oil price in the market. Tensions in oil-producing or oil-exporting countries often lead to a rise in oil prices, impacted by the shortage in supply. Also, events such as war, natural disasters, and political upheaval influence the rise in oil rates.
3. Future Supply of Oil and Inventories: The biggest oil-producing nations reserve crude oil to keep their economies healthy in case the oil prices incline due to several reasons. These countries stock up their inventories and then spread the supply across the economy to keep oil prices stable.

Petrol Price Calculation in Hyderabad

Know how the petrol price in Hyderabad is calculated by State-owned oil companies. Prices shown here are as of 3 January 2019.

Petrol Price in Hyderabad Compared to other Metro Cities

The VAT levied on the sale of petrol in Hyderabad is the highest among other states. While petrol attracts VAT of 35.20%, other major metro cities such as Delhi charges 27%, in Mumbai, the VAT on petrol is 26%, while in Chennai it's 34%.

Petrol Price Vs. Diesel Price in Hyderabad

The basic cost of crude oil is similar for both petrol and diesel, however, taxes on petrol is higher compared to diesel. In Hyderabad, petrol attracts VAT of 35.20%, while diesel attracts 27%, making the former costlier.

Why Petrol is not under GST?

A new taxation system known as the Goods and Service Tax (GST) was introduced in India from 16 July 2017. However, five petroleum products such as petrol, diesel, natural gas, crude oil, and Aviation Turbine Fuel (ATF) were exempted from the GST. This is because, both the Centre and states were not in favour of GST levied on the sale of petrol and diesel. By bringing petrol and diesel under the GST, the Centre could lose up to Rs.20,000 crore as revenue generated through excise duty, while the states wanted to keep their revenue pool intact for any contingency.

Also, the total tax incidence of excise duty and VAT is about 45-50% on petrol, while diesel attracts about 35-40%. Under the GST, the highest tax incidence is 28%, thereby reducing the revenue generated by both the Central government and states. The GST is a charged as a percentage on the ex-factory price of the commodity which could have a huge impact on the final selling price whenever the refinery price is hiked amid the rise in crude oil prices in the international market and it could be true vice versa as well.

If petrol is brought under the ambit of the GST, the final price we pay towards the purchase of petrol will certainly decline, benefiting consumers the most. That said, we need to see if there will be a different tax structure for petroleum products as they are a huge source of revenue for both the Centre and states.

State Taxes and Petrol Price in Hyderabad

State and central government taxes form about 50% of the selling price of petrol in Hyderabad. While the state government of Telangana levies a value added tax (VAT) of 35.20% on a litre of petrol, the central government's excise duty is Rs. 19.48/Lt of petrol.

The VAT levied by the state government is highest among the other states in India and is the second highest among the south Indian states.

It was reported that the non-abolishment of entry tax, which is 8% of VAT, by the Telangana government is the reason for high tax rate in the state. As per the new goods and services tax (GST) act, all taxes including the entry tax need to be abolished. However, the state government is still collecting entry tax as part of VAT and preventing people from enjoying the reduced tax benefits.

How Often Petrol Prices are Revised in Hyderabad?

With the introduction of dynamic fuel pricing or daily revision of prices, petrol prices in Hyderabad are revised on a daily basis with effect from 16 June 2017.

Before dynamic pricing, petrol prices in the city were revised on a fortnightly basis, i.e., on 1st and 16th of every month. But now with the daily price revision in place, Hyderabadis, along with people from other cities, have to pay a different price every day for petrol.

The updated petrol price will be displayed at the petrol pumps within the city. As per the new regulations, all the petrol pumps need to update the revised petrol price by 6 a.m. every morning. While automated petrol stations, which are centrally connected, will have an auto update of petrol price in Hyderabad, the non-automated stations have to do it manually, by fetching the same from the oil company's websites.

Customers can download the mobile apps of respective oil companies such as the state-owned Indian Oil, Hindustan Petroleum, Bharat Petroleum and privately-held Shell and Essar to find the daily revised petrol price.

For dealer/fuel station-specific price, customers can SMS the dealer's code, which is again displayed at the petrol pump, to a specific number as allotted by the oil companies.

Effect of GST on Hyderabad Petrol Price

As we all are aware, the Indian government has implemented a new tax system to charge all the goods and services in the country. Popularly known as GST, the goods and services tax is an indirect tax levied on the supply of goods and services in the country.

GST successfully replaced all state and central taxes levied at cascading stages on a product/service. Since its inception, many of us are curious about how GST affects petrol price in Hyderabad. If you are one among them, here is the eye-opener.

The effect of GST on petrol price is currently nil, as petrol along with other petroleum products, are not taxed under GST. They still have the old tax model, which includes state levied value added tax (VAT) and centre levied excise duty.

This is the reason why petrol prices remained least affected, even after GST became effective from July 2017.

However, experts opine that bringing petrol under GST would significantly bring its price down as the combined state and central taxes on petrol are more than the highest tax rate levied under GST.

Petrol versus Diesel Rate in Hyderabad

Petrol price in Hyderabad, just like in other cities, is higher than the diesel price. Though both petrol and diesel are extracted from the same crude oil, the price difference is mainly due to the difference in the taxes levied on each product, the difference in the international crude oil price and to some extent the difference in dealer's margin.

While the central excise tax levied on petrol is Rs. 19.48/Lt, it is Rs.15.33/Lt on diesel. Similarly, there is a difference in the value added tax (VAT) levied by the state government. The VAT on petrol in Telangana state is 35.20%, whereas it is only 27% on diesel.

The difference in tax is what makes petrol dearer than diesel. Other factors that make a marginal difference in the price of petrol and diesel are the dealer's margin, oil company's profits, cost of marketing, transport and other charges.

*Disclaimer: BankBazaar makes no guarantee or warranty on the accuracy of the data provided on this page, the prevailing prices are susceptible to change and provided on an as-is basis. We accept no liability for any loss arising from the use of the data contained on this website.