Petrol price reduction is warranted but the Government looks in no mood to reduce the multi-times increased excise duties of the last few years…
India is grappling with terribly high fuel prices and this has affected each and everyone of us. Even if you do not ride a car or a two-wheeler, this directly impacts you since prices of almost every commodity have risen. Though there has been a notion that has been propagated that fuel prices depend on international crude prices and dollar-rupee rate but that clearly is not the complete truth!
Specially, in the last year or so, there has been a huge surge in the pricing of combustion fuel in the country which was never seen before.
Recently, the price of crude oil has dipped and that should ideally translate to a reduction in retail prices of petrol and diesel, however, that has not really been the case. There have been minor negligible reductions, however, not to the tune of the actual changes.
While the crude oil prices in the global market have fallen the oil companies are unsure about it. They suspect the price may shoot up once more hence the petrol prices are yet to see concrete declines.
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Around August 1st week and later there was around a dip of $3 a barrel of crude oil from the existing global price of $73.54.
This is nothing unusual as the pandemic is lightening its grip all through the world. So, various businesses that require fuel to move their logistics will increase their consumption.
Usually, with $1 rise or dip in the global cost of fuel affects the retail market by 45 to 50 paise a liter, if the dollar-rupee exchange does not fluctuate too much. So, you must be thinking the petroleum price should come down in India technically.
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It is the insane level of taxation on fuel that is the main culprit. Taking advantage of the extremely low crude prices, Indian Government raised excise duty on fuel multiple times. This meant that the amount that was to reach common man through retail price reduction never reached us.
Though petrol and diesel prices are at an all time high in India, crude prices are not even half of what they were many years back. Just to give you a rough idea, if retail price of petrol in India is around Rs 100, the actual price of petrol hovers around Rs 35 only! Most of the remaining amount comprises various state and central taxes and levies!
Right from last year petroleum has been increasing continuously. It went from INR 69.59 a liter to INR 101.84 a liter. Similarly, diesel prices in the retail market of Delhi climbed up from INR 62.29 to INR 89.27 a litre.