Question

Why petroleum is costly ?​

Answer 1

The petrol price cycle is a function of competition and occurs as fuel stations discount fuel to compete for a share of the market. When the discounting reaches an unsustainable level and profit margins become too low, the retailers drive the price back up again.

Answer 2

The primary reason for this recent spike is levying of higher taxation. While the Narendra Modi government at the centre has increased excise duty on petrol and diesel, several state governments have raised the value-added tax they charge.

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