# How Fuel & Bullion Prices Are Set in India

Retail fuel and bullion prices in India are not set by a single authority. A pump
price and a jeweller's rate are each built from several layers, and those layers
explain almost every question people ask about why a rate is what it is.

## What a fuel price is made of

A petrol or diesel price is a stack, not a single figure. The base is the refinery
gate price, which follows international crude oil. On top sit the central excise duty,
the dealer commission that pays the pump operator, and the freight needed to move the
product from the depot to the outlet.

The last layer is the one that makes one state different from its neighbour: state
VAT or sales tax, which each state government sets for itself. Two cities a hundred
kilometres apart can show noticeably different pump prices for exactly this reason, and
no central announcement changes it. Retailers have very little room to undercut one
another, which is why prices across a single city are almost always identical.

## When prices change

Under the daily revision system, petrol and diesel prices in India are reviewed every
morning at 6 am. Oil marketing companies publish the new rate, pumps update their boards,
and that figure holds for the rest of the day. Stations cannot legally charge more than
the published rate, and a pump found doing so is answerable to the district
administration.

LPG cylinder prices, CNG and PNG do not follow that daily cycle. LPG is revised
periodically — often monthly — and CNG and piped gas are set by the local city gas
distributor, so their movements are smaller and less frequent.

## How gold and silver rates are set

The rupee price of bullion is built from four layers: the international spot price,
quoted in US dollars per troy ounce; the rupee-dollar exchange rate, where a weaker rupee
raises the local price even when the global price is flat; the import duty on the landed
value; and the GST that applies when you buy.

On top of those, a jeweller adds making charges for the work that goes into a piece.
That is why two shops can quote the same daily rate and still show different final bills.
The figure we publish is the metal value — the number to compare one jeweller against
another, before wastage and making charges are added.

Bullion benchmarks are published each working morning and jewellers reprice shortly
after. Rates do not move on Sundays or major festival days, and they do not move minute to
minute the way share prices do.

## Why the same commodity costs different amounts in different cities

For fuel, the answer is almost always tax. Central excise duty is uniform nationwide,
but state VAT and local levies are not, and transport adds a smaller amount on top. For
bullion the national rate is the same, but local jeweller premia and making charges differ
— which is why the bill at the counter can vary even when the headline rate does not.

## Practical ways to spend less

- **Tyre pressure** is the cheapest fuel saving there is.
Under-inflated tyres raise rolling resistance, and the penalty shows up at the pump
rather than anywhere you would notice.
- **Air conditioning** is the biggest single load on a small engine. On
short city runs, using the fan instead of the compressor makes a measurable difference
over a tank.
- **Stop-start traffic** is where fuel goes. Combining errands into one
trip, and travelling before the peak rather than during it, does more for your monthly
bill than any additive on the shelf.
- **Keep a rough record** of what you spend each month. A note in your
phone turns a price rise from an annoyance into a number you can plan around.
- For bullion, **buy on the rate rather than the discount**, insist on
BIS hallmarking for gold, and ask for an invoice that separates weight, purity, making
charges and GST.

## How we source and publish these rates

Every rate published on IndiRate.in is stored with the date it applied to, which is
what makes our daily and monthly history possible. We do not back-fill figures we did not
record, and we do not invent a movement to make a trend look livelier. Rates are compiled
from official oil marketing company notifications, city gas distribution utilities, and
bullion market sources such as the India Bullion and Jewellers Association (IBJA).

If a rate here ever disagrees with the board at your local pump or the price at the
counter, that source is the one that governs what you pay — tell us and we will correct
our record.

## Where to go next

See today's rates by
[commodity](/petrol-price),
by [state](/states) or
by [city](/cities).

← Back to home

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Source: https://indirate.in/how-prices-are-set