Petrol and Diesel Price in Punjab

The state of Punjab lies in the northern part of India. Petroleum plays an essential role in a country’s economy, regardless of geography. Naturally, petroleum is refined to produce various types of fuels. This includes crude oil, natural gas, plant liquids, liquefied refinery gases, and other refined petroleum products such as gasoline, petrol, and diesel. Punjab is a state where agriculture plays a significant role in the state’s economy (the extensive use of tractors and other agricultural equipment). Hence, the diesel and petrol price in Punjab plays a crucial role.

Diesel and petrol price in Punjab in Punjab fluctuate daily. Many industries, including the agro-industry, get affected due to these fluctuations. Petrol/diesel prices are linked to other costs, either directly or indirectly. The fluctuating fuel prices (petrol/diesel) affect the prices of essential commodities and also affect the price of agricultural products.

Petrol Price in Punjab

Petrol Price in Punjab is INR 96.54 per liter (average). Pathankot has the highest petrol price in punjab at 97.06. The city with the lowest petrol price in Punjab is Jalandhar at 96.09.

As mentioned earlier, the petrol price in Punjab is not fixed but keeps changing daily. It is the petrol price that affects the daily cost of living of the residents of Punjab. The petrol price of Punjab also affects the petrochemical industries present in Punjab. Hence, it can be said that the effects of petrol price in Punjab can be far-reaching.

Diesel Price in Punjab

Diesel Price in Punjab is INR 86.79 per liter (average). Pathankot has the highest diesel price in punjab at 87.37. The city with the lowest diesel price in Punjab is Jalandhar at 86.29.

Like petrol prices, diesel prices in Punjab are also dynamic and fluctuate daily. The daily fluctuations in diesel prices in Punjab directly affect the drivers of heavy goods or passenger vehicles. The price is dynamic and is based on several factors.

Factors determining the petrol and diesel price in Punjab

Several factors are essential in determining petrol/diesel prices in Punjab.

• Rate of crude oil – The crude oil rate is considered to be the most important determinant of petrol/diesel prices in Punjab. Oil-producing nations reduce the rate by raising the production, and vice-versa. This directly affects the petrol or diesel price in Punjab as 80% of India's energy requirements depend on imports.
• Freight charges – If petrol/diesel has to be transported to cities and towns far away from the distribution depot, then petrol/diesel prices tend to be higher as it adds to the transportation cost.
• Inventory – Oil manufacturing countries (OMCs) maintain an inventory for up to 6 weeks which helps them regulate petrol prices whenever a large fluctuation is noticed in international rates.

• The strength of the Indian Rupee – One of the determining factors of petrol and diesel prices in Punjab is the current strength of the Indian currency (Indian Rupee). The Oil Marketing Companies, i.e., OMCs in India, purchase crude oil in US dollars but sell it in Indian Rupees. The high rate of crude oil combined with a weak Indian Rupee against the dollar impacts the petrol/diesel prices in Punjab.

• Taxation – The government at the Centre levied excise duty on each litre of petrol/diesel and added a tax percentage on each litre to each state government.

Reasons for rapid change in Petrol/Diesel price in Punjab

The petrol price in Punjab is volatile and keeps fluctuating daily. Several reasons for it include the supply and demand of petrol in Punjab, the VAT levied by Punjab on petrol, and logistics.

The VAT on petrol in Punjab is 35.25%. This is much higher than in states like Delhi where the petrol price is lower. The supply and demand of petrol in Punjab is also a major factor in the change of price in petrol in Punjab. Less supply of fuel to Punjab due to transportation issues affecting the supply chain and hurting the petrol price in Punjab. Here, the role of logistics should be considered in the change in petrol prices in Punjab. The farther the petrol pump is from the depot, the higher the petrol price in Punjab will be.

Conclusion

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