Petrol & Diesel
How petrol and diesel prices are decided in India every day
This article in another language: हिंदीગુજરાતી
Short answer: the pump price of petrol or diesel is the oil company's base price plus freight, central excise duty, the dealer's commission and the state's VAT. Since 16 June 2017, prices can be revised every day at 6 am by Indian Oil, Bharat Petroleum and Hindustan Petroleum. Because each state sets its own VAT, prices differ from state to state. You can check any pump's rate by sending its dealer code by SMS.
Why can fuel prices change every day?
Since 16 June 2017, petrol and diesel prices in India have been set daily. The public sector oil marketing companies — Indian Oil (IOCL), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) — apply any change at 6 am. Before that, prices were revised once a fortnight.
Daily pricing does not mean prices move every day. In practice rates often stay unchanged for weeks or months; the system simply allows a change on any morning.
What makes up the price of a litre?
- Base price: the cost of crude oil, refining and the oil company's expenses. It follows international crude prices and the rupee-dollar exchange rate.
- Freight: the cost of moving fuel from the refinery or depot to the pump.
- Central excise duty: the same across the country.
- Dealer commission: the pump owner's share.
- State VAT or sales tax: each state sets its own rate, and some add a cess.
Petrol and diesel are currently outside GST, so the Centre and the states levy their own taxes on them. The Petroleum Planning & Analysis Cell (PPAC) of the petroleum ministry publishes price build-up data.
Why do prices differ between states and cities?
The biggest reason is state VAT. A state with higher VAT will have costlier fuel, which is why people living near a state border sometimes find it cheaper to fill up across it. Within one state, the distance from the depot changes the freight cost, so cities can differ by a few paise.
How do I check my pump's rate today?
Every petrol pump has a dealer code, displayed at the pump. Send it by SMS to get that pump's current price:
| Company | SMS format | Number |
|---|---|---|
| Indian Oil | RSP (dealer code) | 9224992249 |
| Bharat Petroleum | RSP (dealer code) | 9223112222 |
| Hindustan Petroleum | HPPRICE (dealer code) | 9222201122 |
Companies can change these numbers, so confirm them on the company's official website or app, which also show city-wise prices.
What should I check at the pump?
- The meter starts at zero: look at the dispenser before filling begins.
- The 5-litre measure: pumps keep a 5-litre measure certified by the Legal Metrology department. If you doubt the quantity, you can ask for a check.
- The filter paper test: if you suspect adulterated petrol, ask for a filter paper test. Pure petrol evaporates without leaving a stain.
- Take a receipt, and register any complaint with the company's customer care.
Follow fuel price news on our Petrol & Diesel page.
Sources
The facts in this article were checked against these official sources:
Frequently asked questions
What time do new petrol and diesel prices apply?
Oil companies apply any new prices at 6 am. If there is no change, the previous day's rate continues.
Why is there no GST on petrol?
Petrol, diesel and some other petroleum products are currently kept outside GST. The Centre charges excise duty on them and the states charge VAT.
Why is petrol cheaper in a nearby city?
If the city is in another state, its VAT rate is different. Within the same state, freight from the depot changes the price slightly.
Where do I find a pump's dealer code?
The dealer code is displayed on the pump's board or near the dispenser. Staff at the pump can also tell you.