Diesel Price in Tamil Nadu

Tamil Nadu is situated in the southern part of India. It is one of the most popular states in the country which occupies the seventh position in terms of demography. The diesel prices in Tamil Nadu is revised on a regular basis in sync with global crude oil prices which is currently experiencing volatility. The revised diesel rates come into effect starting from 6 am in the morning and the same will be displayed in most of the fuel filling stations across the state. Tamil Nadu is the second largest state which contributes Rs 15.96 lakh crore of gross domestic product towards the economy of India. The state is witnessing a rapid pace in terms of development which in turn has led to the increased dependency on diesel.

In 2024, it would result as the 16^th consecutive year for the demand of crude oil and petroleum products to be on a rise in India. The oil and gas sector is among the eight core industries in India and plays a major role in influencing the decision-making for all the other important sections of the economy. Thus, marginal changes in international trade or demand fro crude oil can have noticeable impacts on domestic diesel prices in Chennai as well.

Chennai is the largest city of Tamil Nadu with more residing population that any other city in India. As per the total passenger car sales made recently, most of the cars were bought by Chennai as the standard of living and earnings are quite high here than the neighbouring regions around. Two of the major car manufacturers in the country have notified that this year more than 90% of their top selling models were diesel engine cars, which indicates a strong potential for diesel prices in Chennai to have positive trend later.

What Factors Impact Diesel Rates In Tamil Nadu Today?

In today's fast phased world with modern connectivity and strong trade dependencies, numerous aspects come into play while determining petrol rates in Tamil Nadu today and other parts of the country. Since the usage of diesel is mostly pushed towards transport vehicles and agricultural machineries in Tamil Nadu, the central and state government play major role to have stable petrol prices in Tamil Nadu today.

Economic development of the region boost exchange of goods and services, which is why cities and major towns experience robust demand and supply. Better employment opportunities ensure the vehicle demand stays strong in the region. Moreover in the recent year with quick availability of loans with monthly instalments have increased the vehicle sales, especially in diesel variant engines.

The development in connectivity and improved infrastructure have facilitated for consistent rise in demand for fuel and ultimately uplifting push for diesel rates in Tamil Nadu today.

Government regulations are another factors that impact fuel prices in India as the supply of 80% from international sources depends on the norms. When recently there is a trade agreement with oil exporting countries can increase the supply, which can help for a downward push in diesel prices in Tamil Nadu today.

Indian government receives the highest contribution from fuel-tax from all corners of the country and revenue Generation is one of the significant reasons behind hike in diesel prices of Delhi today. If the government decides to increase the charges on the sector to infuse infrastructure investment, then a slight increase is evident in Delhi diesel rates today.

Apart from this, international aspects such as overall demand-supply scenario, trade agreements, geopolitical tensions, war escalations and regulations of crude oil exporting countries can contribute similarly to diesel prices locally. A disruption can cause the demand to increase, which would indirectly impact diesel rates in Delhi, while contradicting this, if recently there has been increase in supply by oil producing countries, a slight stability is also visible in diesel prices of Delhi today.

Factors Affecting Diesel Rates in Tamil Nadu

The following are the factors which mainly affect the diesel prices in the state of Tamil Nadu.

• Currency Exchange Rate 
• Crude oil prices at the global level
• Taxes levied by Central Government
• State-based Value – Added Tax
• Profit margins by oil marketing companies
• Dealer commissions

Diesel Price Vs Petrol Price in Tamil Nadu

One can observe the difference between diesel and petrol prices in all the fuel filling stations. The main reason behind the difference in the prices is mainly attributed to the state-based value added tax which differs for both petrol as well as diesel across all the states in India.

The state government levied value added tax (VAT) for petrol in Tamil Nadu stands at 32.11% for every litre of fuel whereas it is recorded at 24.04% on diesel.