Soon Price of Petrol in Rs. 60 – Yes, you heard it Right !!
In a few days, Petrol will be sold at Rs. 60……………. BUT for Half liters.
Fuel prices have been shooting to new heights every week. Recently we saw petrol prices making a century even when the real price of crude is somewhat near $70 per barrel. Even the price of diesel has touched the three digits in states like Rajasthan.
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Why there is a massive hike in Petrol and diesel price
It has been well established that the market will decide the price of Petrol and diesel. But one must be thinking that if price rises with the increase in the price of international crude, then why is the reverse not seen?
Well, technically, it should, but practically, the government doesn’t want it !!
On paper, the price of crude oil depends on international market forces, and the government has nothing to do with it. But at the same time, the government has not set it free. This means the government can regulate the price according to their will with the help of Taxations.
Taxations on price of Petrol and Diesel
Taxation on Petrol and diesel is kept out of GST ( Goods and services tax ) and is still regulated by the VAT ( Value Added Tax ) system. Thus, the central government and State governments keep modifying their prices according to their will.
The base price of Petrol is still somewhere near one-third of the retail price. But governments keep increasing their share of revenue by increasing the fuel tax. About two-thirds of the price paid by the people go as tax.
Advent of Corona
Due to the coronavirus, the world economy took a massive plunge. Conditions in India were the same too. India was already dealing with price hikes in Petrol and diesel, and with the onset of Corona, prices shot up drastically.
The government was already struggling to generate revenue in these tough times. Hiking the taxes on Petrol, diesel, CNG, LPG, etc., was an easy go for the government.
The situation even became more unavoidable due to the thunderous impact of the second wave of Corona. It again showed the horror of complete Lockdown of economic activities.
What’s in Buzz
Well, it’s quite surprising that even after such a massive hike in Petrol and diesel prices, there is a very small-scale uproar against the price hike.
Opposition parties are too unable to bring up such a huge issue effectively (for which Corona may be one reason). Since the larger population is still inside the house and will come out in a few days, no such backlash has been noticed.
Effect on public
Everyone knows how much impact the price hike in diesel rates can have on day-to-day essentials. With the increased rates in logistics, prices of goods will shoot up as well. We already are witnessing such hiked prices of many products.
Even commuting is getting so expensive that a large chunk of one’s salary/earning is dedicated to fueling.
The government seems in no hurry to lower the prices as of now. Even the demand of including Petrol and diesel in GST tax slabs seems out of the talks; neither center wants it nor the state.
It’s certainly a matter of time that we could witness the price of Petrol reaching the mark of 110, 120, etc. onwards.
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The country was witnessing the hike in prices of fuel long before the onset of Corona. So, blaming Corona for every cause is not at all acceptable.
And why do the prices never rise when there are elections around?
We all agree that the nation is going through tough times due to the coronavirus, and concrete steps should be taken to hold up the economy.
But focusing largely on fuel for revenue generation doesn’t seem ethical on the part of the governments.
Increasing the price of fuels is an easy choice by the governments to generate revenue, but who decides the ceiling of price hike. The soaring price seems to have no limits, and almost every day, we hear prices of Petrol and diesel making new highs.
There is a limit to what a “Common Man” can spend. They, themselves, are suffering from no salary, job loss, etc., overburdening them with more expenditure will make their life tougher.
Hope both the Central and State governments come up with some alternate methods to add up to the revenues as well, and we could see some better reforms ( like bringing Petrol and diesel in GST, etc.) for controlling the soaring prices.