{"id":83110,"date":"2021-02-17T10:26:40","date_gmt":"2021-02-17T04:56:40","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=83110"},"modified":"2021-02-17T12:16:53","modified_gmt":"2021-02-17T06:46:53","slug":"why-prices-of-petrol-and-diesel-are-rising","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/why-prices-of-petrol-and-diesel-are-rising\/","title":{"rendered":"Why prices of Petrol and Diesel are rising?"},"content":{"rendered":"<p><b>Synopsis: <\/b><span style=\"font-weight: 400;\">Retail prices of petrol and diesel have reached record highs in India. One major reason is a heavy tax on Petrol and diesel in India.<\/span><\/p>\n<p><b>Introduction\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The price of petrol is touching Rs 89 per litre in Delhi and diesel reaching Rs 86.30 per litre in Mumbai. The government states that the reason behind this rise in price is an increase in global crude prices by more than 50 per cent.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While retail prices of both fuels in other countries are just reaching pre-pandemic levels, Indian consumers are paying a lot more.<\/span><\/p>\n<p><b>Why are consumers in India paying more for petrol and diesel?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Retail petrol and diesel prices are linked to global crude oil prices in theory. That means if crude prices fall, retails prices should come down too, and vice versa. However, this does not happen in reality especially in India.<\/span><\/p>\n<ol>\n<li><b>First,<\/b><span style=\"font-weight: 400;\"> when global prices go up, the consumer has to pay the increase in price. But when the prices decrease, <\/span><b>the government introduces fresh taxes to ensure that it collects extra revenues.\u00a0<\/b>\n<ul>\n<li><b>For instance<\/b><span style=\"font-weight: 400;\">, the <\/span><span style=\"font-weight: 400;\">government hiked the central excise duty on petrol and diesel at the beginning of 2020 to boost <\/span><b>revenues.<\/b> The government did this to boost <strong>economic<\/strong><b> activity government<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span>This resulted in <span style=\"font-weight: 400;\">the revenue gain to the government.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Currently, state and central taxes amount to around 180 per cent of the base price of petrol and 141 per cent of the base price of diesel in Delhi.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Second,<\/b> <b>crude oil prices collapsed during the pandemic. <\/b><span style=\"font-weight: 400;\">But as economies have reduced travel restrictions, global demand has improved, and prices have been recovering.<\/span><\/li>\n<li><b>Third,<\/b> <b>the controlled production of crude amid rising demand<\/b><span style=\"font-weight: 400;\"> has been another key factor in boosting oil prices.<\/span><\/li>\n<li><b>Fourth, <\/b><span style=\"font-weight: 400;\">Oil Marketing Companies (OMCs) are free to set prices for petrol and diesel based on international prices on paper. Increase in central levies has meant that <\/span><b>the consumer hasn\u2019t benefited from low international prices <\/b><span style=\"font-weight: 400;\">and has ended up bearing the cost of rising crude oil prices.<\/span><\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\"><\/li>\n<\/ul>\n<p><a href=\"https:\/\/forumias.com\/blog\/why-oil-prices-are-so-high-in-india-how-and-why-should-india-achieve-end-of-oil-age\/\">Read How India should end oil age?<\/a><\/p>\n<p><b>Conclusion\u00a0<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Experts suggest that the impact of rising fuel inflation has been balanced by declining food inflation. However, the consumers with greater expenditure on travel are bearing the higher prices even though the overall inflation reduced down to 4.06 per cent in January.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Synopsis: Retail prices of petrol and diesel have reached record highs in India. One major reason is a heavy tax on Petrol and diesel in India. Introduction\u00a0 The price of petrol is touching Rs 89 per litre in Delhi and diesel reaching Rs 86.30 per litre in Mumbai. The government states that the reason behind&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/why-prices-of-petrol-and-diesel-are-rising\/\">Continue reading <span class=\"screen-reader-text\">Why prices of Petrol and Diesel are rising?<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[1283,1397],"class_list":["post-83110","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-eco_1","tag-eco_9","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704938209},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/83110","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=83110"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/83110\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=83110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=83110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=83110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}