Petrol and Diesel Price in Tamil Nadu
Today Petrol Price in Tamil Nadu is INR 101.72 per liter and Diesel Price in Tamil Nadu today stand at INR 93.32 per liter.
Petrol price in Tamil Nadu changes every day. It has doubled within the last 15 years from 2006 to 2021. Now it has crossed the Rs 100-per-litre mark in Chennai and other cities.
Petrol price in Tamil Nadu*
Today's Petrol Price in Tamil Nadu is INR 101.72 per liter.
Oil marketers use a dynamic fuel pricing method to set the current petrol price in Tamil Nadu. Based on this formula and other factors, the petrol price is revised at 6 a.m. every day. Other factors that affect fuel prices in Tamil Nadu are crude oil cost, fuel demands and other economic factors.
India imports about 80% of its crude oil from foreign countries. Thus, import costs and freight charges get added too.
Oil manufacturing costs and dollar-rupee conversion can also impact the price.
On top of this lies transportation taxes and dealer profit. All these together impact the petrol price in Tamil Nadu.
This transparent price revision makes it easy for you to know the most recent price online.
Diesel price in Tamil Nadu
The Diesel Price in Tamil Nadu Stand at INR 93.32 per liter.
Vehicle owners in Tamil Nadu consume a fair amount of diesel next to petrol. Similar to petrol pricing, diesel price in Tamil Nadu is set based on the dynamic fuel pricing method. Diesel price is lower than petrol price in all states of India. An interesting fact is that petrol price is cheaper than diesel all over the world. However, in India, diesel is the backbone of industries and agriculture. Hence, the Indian Government offers this at a subsidy price.
Petrol tax bifurcations in Tamil Nadu
52% of the fuel price you pay belongs to taxes in Tamil Nadu. The central government taxes fuels and excise duty. It is 13% of
1-litre petrol. Tamil Nadu is one of the states that excise VAT over petrol prices along with excise duty. VAT imposed by Tamil Nadu is between 12.6 to 16% for 1-litre petrol. VAT helps the state government to earn revenue from fuel distribution. VAT is a variable component while excise duty is fixed. This is why different states have different fuel prices.
As a price reduction strategy, the Tamil Nadu Government has reduced Rs 3 from VAT on August 2022. After that, there were no revisions in tax on fuel prices.
Petrol price and its impact on the economy
The skyrocketing petrol prices affect the Indian economy in the following ways:
- Inflation
Higher petrol prices cause inflation by increasing the prices of other goods being sold. It is mainly because fuel price increases transit costs. If petrol prices go up by 10%, commodities price increase by 5%. The government will be in a position to curb prices by reducing taxes. But this can affect their revenue. Hence, they will have to create polished budgets where fuel subsidies can still exist.
With an increase in vehicles, the demand for petrol will be more than ever. This can further up the petrol price in Tamil Nadu.
- Higher subsidy
Central and state government taxes are decided based on fuel prices. If the fuel price rises, the taxes rise too. Thus, the petrol price in Tamil Nadu rises further.
- Balance of payments
Crude oil accounts for 20% of India's imports. If this rises in price, import bills will peak too. This will only lead to the Current Account Deficit (CAD).
- Rupee value reduction
A higher CAD will reduce the country's currency value. CAD denotes higher import and lower export activities, which means that the country is selling its currency to buy things in dollars. The increase in differences results in reduced native currency value.
- Dynamic pricing
The Indian Government has introduced the dynamic pricing method on July 2017. This method allows oil companies to change prices daily as per real-time international market rates.
Dynamic pricing is a tech-based algorithm that can reflect price changes in global markets.
Traditionally, changes in crude oil prices take days to reflect in the petrol price in Tamil Nadu and other states. With dynamic pricing, oil companies can regulate sharp increase or decrease in prices. It is advantageous for them as they can have improved margins.
As the prices are revised daily, the price change is in paise. This negligible change reduces the pressure on the government about price hikes.
Conclusion
Tamil Nadu has constantly witnessed sharp fuel price rises. From 2020 to 2022, petrol prices have increased by more than Rs 15. Also, Petrol prices in Tamil Nadu change negligibly from one city to another. This is because of internal transit and pump charges.
These minute price changes affect car owners a lot. Only If you stay updated, you can incur the right cost.
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