The skyrocketing price of fuel is the major reason for angst among people currently. With prices crossing Rs 100/litre in some states, people have started adjusting their monthly budgets in order to accommodate the everyday rising fuel prices. In this article, we will discuss the main reasons behind the increasing fuel prices.
The fuel prices had seen a continuous rise for 12 days, with prices showing stability on Sunday as well as today. Prices have touched Rs 97/litre for petrol and Rs 88.06/litre for diesel in Mumbai, making it the most expensive metro city in terms of fuel prices.
The prices have, however, touched Rs 101.22/litre for petrol and 93.23/litre for diesel in Rajasthan’s Sri Ganganagar, followed by Madhya Pradesh’s Annupar where petrol costs Rs 100.98/litre and diesel Rs 91.43/litre. Both Rajasthan and Madhya Pradesh have the highest asking of value-added tax on fuel, making them sit at the top spot.
What is affecting fuel prices?
The current price of crude oil stands at around $63 per barrel which is close to Rs 4565 per barrel. The international prices, however, have a lesser role to play in the increase and the taxes imposed by the central and state governments have a much higher role here.
The central government justifies charging higher tax on petrol and diesel, citing Covid-19 and job generation as the major reasons. On the positive side, states like West Bengal, Assam, Meghalaya and Rajasthan, have reduced their personal VATs to give some relief to the consumers.
The Union Petroleum and Natural Gas Minister, Dharmendra Pradhan, has cited international fuel manufacturing countries producing less fuel to gain profits as one of the major reasons for the rising prices.
The Central Minister also cited a reduction in the production of fuel by international countries which has also affected the fuel prices. The major reason behind countries now producing lesser fuel might be the growing interest of multiple nations towards EV, with many already setting goals to turn completely electric, shunning gasoline-powered automobiles. It could also be because of many countries facing high levels of unemployment due to the pandemic and rising economic despair.
We are not sure how long will it take before this trend continues, but if this is the major reason, the future looks bleak regarding fuel prices. We hope someday these prices stabilise.
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