What is the Exact Reason for Diesel and Petrol Price Rise in the Country?
Today, the pricing of petrol and diesel is done based on the exchange rate, the USD/INR, and the price of unrefined oil. Both the USD/INR exchange rate and crude oil expenses are the global elements affecting the value of fuels. Diesel and petrol prices in India have already crossed their multi-year highs already. In Mumbai, the capital city of Maharashtra, a litre of petrol has been priced over Rs.80.
In other metro cities such as Chennai, Kolkata and Delhi, fuels have become expensive. In fact, the opposition party leaders and fuel consumers across the country have raised concerns over continually accelerating fuel rates. No actions have been taken by the government to control them.
Compared to other Asian countries such as Pakistan, Bangladesh, Sri Lanka, both diesel and petrol prices are higher because of taxes, which account for at least 50% of the retail selling price. Taxes are of two types: excise duty and sales tax. The government levies excise duty, while the state governments will levy the sales tax. As of August 2018, on diesel per litre, excise duty was Rs.15.33, while on petrol per litre, excise duty was Rs.19.48. Excise duty has been increased by the BJP Government.
Because of this reasons, fuel have become expensive across the country. The cost of crude oil per barrel also makes a big difference. It has increased steadily. In April 2018, the average cost of a barrel of crude oil was $69.30. It further increased to $75.31 in May 2018. Moreover, states are also not ready to decrease value-added tax or sales tax. Put simply, fuel prices have skyrocketed in India caused by the exchange rate, the crude oil cost and heavy taxes.