The fuel surge all over India has become a cause of worry for all. Petrol and diesel prices were hiked for the ninth time in the last ten days. The total increase in rates so far has been INR 7.20.
The main reason behind this rise is the increase in the price of Brent crude by 45%. Brent crude is the global benchmark used for crude oil pricing in the North Sea.
It is used to set the price of two-thirds of the world’s internationally traded crude oil supplies. As mentioned by the Union finance minister of India, Nirmala Sitharaman, the price hike is because of the spike in the Brent Crude.
The reason behind this global price rise is the Russia-Ukraine war. The escalating tensions between the two countries have impacted the oil market all over. India imports about 85% of its crude oil requirements out of which 2-3% comes from Russia.
Russia’s war in Ukraine has caused a rapid 20%-plus spike in oil and gas prices in mere weeks. The President of the U.S.A, Joe Biden has announced a ban on imports of Russian oil and gas which has significantly increased the prices.
The impact of this hike has been rampant amongst the common men. They have lost all hopes to see petrol and diesel prices going back to normal. People in many cities of the country such as Delhi and Mumbai are even expecting the prices to surge more.
It is not the first time in the history of India that the prices are unexpectedly hiking. It has been seen in the previous years that the first thing that gets impacted by any unrest in the world/within the country is the fuel prices.
Read More: Will Rising Petrol Prices Pose A Threat To India’s Post-COVID Economic Recovery?
The concerns of the common man include-
- Increase in prices of all the basic necessities like grocery
- The gap between his salary and the hiking prices
- Impact on the household budget
- Fear to lose the job (especially for those who are in delivery, transport, etc. services)
It has never been a delightful sight to watch the fuel prices going up every day. It can be expected in the near future that the prices may start decreasing but it seems impossible to get back to what they were previously.
According to the experts, the prices will remain elevated for a few weeks and there is a possibility that they start going down by mid-April. But the decrease is not expected much as the international rates are surging every day. The international rates have gone up to more than 37% in the past year. India still has only bunked to 5%.
We can expect a decrease of around 2% in the prices through the reduction in taxes. The retail price of petrol is made up of 3 different components – base price that reflects the cost of international oil, central excise duty, and state taxes.
So even if the international rates do not show any decrease, the reduction in levied taxes can do amends. According to government statistics, in almost seven states in the country, half of the price of petrol is collected as tax. If we take Rs. 100 as a mark, Rs. 52.5 goes in tax in Maharashtra, Rs. 52.4 in Andhra Pradesh, Rs. 51.6 in Telangana and so on.
If this share can go down even a bit to stay at par with the increase in the international rates, it can provide some relief to the common man.
Disclaimer: This article is fact-checked
Sources: Hindustan Times, India Today, NDTV, Economic Times
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This post is tagged under: petrol prices, diesel prices, fuel, hike in petrol prices, fuel tax, Russia-Ukraine war, inflation, fuel surge, Brent crude, nirmala sitharaman, tax on fuel, high tax on petrol, supply chain problems, opec+, cheap oil from russia, russia-india relations, will fuel prices ever go down,
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