why did the amount of petrol increased day per day
Answers
Answer:
India imports 84% of its domestic demands of crude oil, which is why the price fluctuates in tandem with global demand. The impact of COVID 19 on the economy and decreased fuel demand initially led to a fall in global oil prices. Now with the market recovering, prices are slowly showing an upward trend. The prospects of developing a Covid-19 vaccine is also a key reason for economic optimism.
· Since Corona virus has hit the economy substantially, to overcome the situation, state governments have increased the duties on petrol and diesel. In fact, taxes constitute 69% of the total price of petrol that we as consumers pay. For example, excise duty on petrol has increased to Rs. 32.9 from Rs. 19.98 at the beginning of the year.
· From the standpoint of pure economics, exchange rate has a profound impact on the amount of oil India can purchase in the international market. This implies we are
able to purchase less oil with the same amount as we did earlier. Inversely, the government needs more money, to import the same quantum of oil.
· Presently the price of petrol and diesel in the National Capital remains unchanged from the week gone by at ₹ 83.71 per litre, and ₹ 73.87 per litre respectively. While in Mumbai, petrol and diesel rates were at ₹ 90.34 per litre and ₹ 80.51 per litre respectively.
The rise in price is due to increase in taxation by the centre and the state, to make up for loss of revenue during the lockdown. Excise duty by centre and VAT by state govt escalates prices. The tax collected is used by the central government to balance the fiscal situation. At 69%, India is one of the most highly fuel-taxed countries in the world, with Italy following at 64%, and USA at a minimal 19%. The exact breakup of petrol prices can be seen from the chart below:
Rajya Sabha member and noted economist, Subramaniam Swami expressed his apprehension on the rising fuel prices,
“Petrol price at Rs. 90 per litre is a monumental exploitation by GoI of the people of India. The price ex-refinery of petrol is Rs. 30/litre. All kinds of taxes and Petrol pump commission add up the remainder Rs.60. In my view petrol must sell at max. Rs. 40 per litre.”
· At this stage it is relevant to note, that the petrol price is largely driven by international agencies which control demand and supply. On the international front, for example, OPEC (Organization of the Petroleum Exporting), countries decided to cut down oil production by 10 million barrels a day, hoping to boost energy prices