Today's Diesel Price in Karnataka

Cars form major part of private vehicles compared to two wheelers as the number of new car registrations are increasing every year.

In an effort to decrease the dependency on fossil fuels and to reduce pollution levels, Karnataka became the first Indian state to roll out Electric Vehicle and Energy Storage Policy, in line with the Indian government's vision to make the country an all-electric vehicle market by 2031.

With the state's vehicular traffic primarily composed of private vehicles such as cars and public vehicles like buses which rely on diesel, the demand for the fuel is high in the state. However, due to less amount of tax levied by the Karnataka on diesel, the diesel price in the state is less compared to other states, which charge a bit higher tax.

Factors Affecting Diesel Rate in Karnataka

The prices of diesel in Karnataka are revised on a daily basis by using the Dynamic Fuel Pricing technique. Diesel prices in Karnataka depend on various factors such as the crude oil prices in the international markets, tax rates, and the value of the rupee against the dollar. In Karnatak, diesel prices are updated at 6 a.m. every day. Just like in other Indian states, diesel rate in Karnataka is affected by various factors which are part of diesel pricing. Diesel pricing includes not just the product price but a few other elements including the state and central government taxes, transportation and freight charges, dealer's and oil company's commission and other charges like surcharge and cess.  Of all the components, major factors that affect the diesel price in Karnataka or in any other Indian state are the international crude oil price, US dollar to rupee exchange rate, and state and central government taxes. India imports most of its fuel requirements from other countries as the existing resources in the country are not sufficient to cater the increasing demand for diesel.

Hence, the journey of diesel begins with the oil marketing companies such as Indian oil, Hindustan Petroleum and Bharat Petroleum, purchasing crude oil from the international oil companies. As the rate of the crude oil is most likely to change on a daily basis, every slight change in the crude oil price in global markets would impact the selling price of diesel in India.

Secondly, as oil trading typically happens in US dollars the change in dollar to rupee exchange rate also impacts the price of diesel.

The third component is the tax levied on diesel. To everyone's surprise, taxes levied on diesel constitute more than 50% of its price. Which means if you are paying Rs. 60/Lt of diesel, you must be paying more than Rs. 30 to the respective state and central governments as taxes.

On a daily basis, however, the state and central taxes remain the same. Any hike or reduction in tax rates would directly impact diesel price. For instance, if Karnataka government cuts the value added tax on diesel, the price of diesel in Karnataka will come down and vice versa.

Other factors that could marginally impact diesel price in the state are dealer's commission and freight charges involved in transporting the fuel to the fuel stations.

How Often Diesel Prices are Revised in Karnataka? 

Diesel prices in Karnataka, just like in any other Indian state, are revised on a daily basis since the dynamic fuel pricing has been introduced in India in June 2017. Dynamic fuel pricing or daily revision of fuel prices is to ensure the retail selling price of diesel in India is in sync with the global crude oil prices. If the global crude oil prices fluctuate on a daily basis, even the slightest drop in the oil price would reach the end customer through dynamic fuel pricing. Further, it will bringing transparency in diesel pricing in India. Prior to dynamic pricing, the diesel prices in Karnataka, similar to all other states, were revised fortnightly based on the average price of the previous 15 days. As per the new dynamic pricing model, all the petrol pumps in Karnataka will update the revised diesel price every day by 6 a.m. and will display the same at the fuel stations.

How to Check Diesel Prices in Karnataka?

The different ways to check diesel prices in Karnataka are mentioned below: 

• SMS: Some companies also offer an SMS service to get the latest fuel prices. 

• Websites: You can visit the websites of oil marketing companies like Indian Oil, Bharat Petroleum, and Hindustan Petroleum to check the prices in your city. 

• Mobile Apps: Many oil marketing companies have mobile apps that provide the latest fuel prices. 

How is the Price of Diesel Determined in Karnataka? 

• Refinery and Freight Charges: The cost of refining crude oil into diesel and the charges for transporting it from the refineries to the petrol pumps across the country are also included in the final price. 

• Dealer Commission: A commission is paid to the dealers who operate the petrol pumps. This commission is also a part of the final price you pay. 

• Central and State Taxes: The central government levies an excise duty, while the state government imposes a Value Added Tax (VAT). 

• Crude Oil Prices: India imports about 85% of its crude oil needs. Therefore, the price of crude oil in the international market is a major determinant of the retail price of diesel in the country.