[bik1906]

Hope everyone had a safe drive for the Republic day weekend. While driving to Gokarna from Blore I noticed a big board in Sira saying Shell fuel prices reduced to local market rates. Since anyway Shell is my normal coffee stop popped in and and lo and behold price of diesel is 90 bucks. Now I'm not sure what Shell charges in town because I only filled there once and it was ridiculously high on diesel. I believe it was close to 110 that one time I filled. So my point is that if they can reduce it on the highway since they know the locals won't touch it at that price, then why are we getting ripped here in the city? Pump pic attached for reference. Anyone with inputs on how pricing is done please chip in.

[vattyboy]

I am shocked to know that Shell fuel prices vary considerably from one city to another.



https://www.shell.in/motorists/shell...-in-india.html

[Shreyans_Jain]

My understanding is that Shell procures its diesel in bulk from Indian Oil. There are no local duties like octrois in play anymore. Perhaps this is a contractual obligation with dealers in certain cities.

[NomadSK]

Originally Posted by bik1906

Anyone with inputs on how pricing is done please chip in.

Public sector Oil Marketing Companies (OMCs) revise the retail prices of petrol and diesel in India on a daily basis, according to changes in the prices of global crude oil and Rupee to Dollar price. The price charged to dealers includes the base price set by OMCs and the freight price.

Hence Retail Price of Petrol/Diesel = Price at which the petrol dealers/distributors buy from OMCs + Excise duty (under Centre's Jurisdiction) + Dealer's Commission + VAT (under state government's Jurisdiction)

Fuel prices in the country does not come under the Goods and Services Tax (GST). While the excise duty is collected by the central government for its coffer, the VAT goes to the state government's revenue. Excise duty rates are uniform across the country, states levy sales tax/ Value Added Tax (VAT) which varies across states, Hence one gets different prices. The central government taxes the production of petroleum products, while states tax their sale. Also, different cities within a State, prices are different due to the variable Freight charges.

[HighOnSpeed]

Originally Posted by bik1906

So my point is that if they can reduce it on the highway since they know the locals won't touch it at that price, then why are we getting ripped here in the city?

Yes. Shell for some reason has decided to keep their prices stupendously high in metros. I don't understand the logic behind their pricing, but maybe they think that city folks have better purchasing power and hence they have still retained those ridiculously high prices. Or perhaps, their cost of bringing the fuel to the retail site and cost of running the service station(salaries, rent, utilities) in Metro cities is much higher. Whatever the case, I don't have a problem meeting my requirements from the PSU OMCs. It is the same fuel anyway!

[Prash1407]

Originally Posted by Shreyans_Jain

My understanding is that Shell procures its diesel in bulk from Indian Oil. There are no local duties like octrois in play anymore. Perhaps this is a contractual obligation with dealers in certain cities.

IMHO, Reliance refinery supplies Oil to BPCL and Shell. Nayara supplies to HP and IOCL.

[Oppanna]

Yes I observed this recently when I filled petrol in Shell bunk Perasandra - Hyderabad highway. Normal Petrol was priced at Rs 104 while the same was priced at Rs 117 in Bangalore!

Upon asking the staff there I was told that this is a franchise outlet and they keep the prices of fuel as per the market variation! Not sure how true this information is.

[_chikku]

Just for travellers info.. Shell at Puttur which is dealer owned and operated, regular diesel is priced at INR 89.02.

[Shreyans_Jain]

Originally Posted by Prash1407

IMHO, Reliance refinery supplies Oil to BPCL and Shell. Nayara supplies to HP and IOCL.

I have it on record from a senior contact at IOCL that they were supplying Shell. Fact is that retailers buy from different refiners, wherever it is cheaper. The fuel at an IOCL pump doesn’t necessarily originate at an IOCL owned refinery. Similarly, it’s the same way for refiners, especially the private ones. Quotas aside, sales always get diverted to wherever margins are higher, which is often export.

[bik1906]

My issue here is that they can obviously charge less because there's no way these dealers are making a loss...but they choose not to and quote the shell quality to justify the price difference....it's just like the shocker all the Jimny owners got with the recent year end 2 lakh discount.....

[for_cars1]

Originally Posted by _chikku

Shell ..regular diesel is priced at INR 89.02.

Until a couple of years back, used to be a regular at Shell. I didn't mind the marginal higher price of fuel assuming that it may be compensated by better quality and quantity of fuel.

Once during the regular full tank visit, I had ended up paying INR 17 more per litre (and a substantial amount for the full tank) at the same regular Shell fuel pump, it was a shocking experience given that there was no increase in fuel prices across the PSU pumps at that time.

They could have atleast informed about the hike or put a clear notice on the abrupt hike so that buyers can make an informed choice.

Felt kind of duped and have never filled at Shell ever since and it has always been PSU pumps post this incident.

[HighOnSpeed]

Originally Posted by Shreyans_Jain

I have it on record from a senior contact at IOCL that they were supplying Shell. Fact is that retailers buy from different refiners, wherever it is cheaper. The fuel at an IOCL pump doesn’t necessarily originate at an IOCL owned refinery. Similarly, it’s the same way for refiners, especially the private ones. Quotas aside, sales always get diverted to wherever margins are higher, which is often export.

You're absolutely right there. The procurement will not happen only from any dedicated refinery. The OMCs will procure from different refineries based on the availability, pricing and the location of the outlets.

[samyD]

Also, different cities within a State, prices are different due to the variable Freight charges.

I still can't understand the price difference in Surat, Vadodara and Ahmedabad. Surat and Ahmedabad are approximately 150kms and 120kms respectively on either side of Vadodara.

[Abhi_Automobile]

Varying prices is very common practice in western world. It’s based on “likelyhood of customer to buy at a price”, which is turn is based on competition, geo-factors, avg local price etc. This concept is applied to common goods such grocery items too. Sometimes a bread cost is significantly different across two supermarkets!

However, I am surprised at the prices are so different for shell fuel though. Usually the difference is marginal.

[PrideRed]

Shell fuel prices for dealer owned outlets are at par with market, about 2 Rs higher. The price listed in website is mostly for company owned outlets. The fuel comes from nearest refinery which supplies fuel to likes of Nayara/IOC/HP etc. A shell outlet was recently opened in my town, is selling fuel at roughly same price(+2 Rs) as IOC.