Skip to main content

Essay on increasing prices of petrol and diesel

increasing prices of petrol and diesel

 

Essay on increasing price of petrol and diesel


With crude oil prices recovering to peak over levels, consumers around the world are paying more for petrol and diesel, but Indian consumers, in particular, are paying more than others because of the high incidence of certain excise duties and state taxes. 


why Indian consumers paying more than before?


Indians have been paying more for petrol and diesel, especially over the past couple of months, and we've seen a number of hikes in the price of petrol and diesel. The immediate cause for this, as the government has been saying is an increase in international crude oil prices. 


But the larger impact on fuel prices is due to hikes in central and state taxes on petrol and diesel over during 2020. the sector particularly raised taxes on petrol by 30rs/ liter and diesel by 16rs/liter. this has by far the largest impact on places today. They've been hitting record highs already in January and they continue to go up to.


why are prices increasing now and why the increasing every single day? 


For that, we need to understand how this pricing is done india import of 80 % of its crude oil requirements and fluctuations in prices globally would impact us. you'd think that since the prices reducing drastically due to lower demand during the pandemic, the price of fuel on the country would actually go down, but not in India? It's not that simple. And for that we need to understand all the components that make up the price of one leader of all of these in India.


First, there's the price of the crude oil and the cost to transport it. Then it includes the cost paid by oil marketing companies known as OMC to a refinery to refine the crude oil. Add to this the margin that the OMC takes and the commission that the dealer that is the petrol pump owner takes. Then add to this the excise duties and the taxes levied by the state.


why is crude oil pricing rising now?


International crude oil prices took a major hit due to the covid- pandemic. Brent crude, in particular, came down to below 20 dollars, due to lower demand due to the pandemic and a number of countries imposing travel restrictions slowing down their economies. 


but in July, prices came to around forty dollars and stayed around that level in October. Since then, however, we've seen a steady increase in the price of crude oil from 40 to now over 60 dollars a barrel and this has been due to a number of factors, including optimism about the vaccine as the rollout goes on. 


We are seeing expectations from both countries that the demand for petrol and diesel and all fuels will go up. Besides this, oil-producing countries have been very disciplined with their production. 


They have maintained in many cases the cuts that they had made during the pandemic. The price is somewhat elevated. In fact, Saudi Arabia even announced that they would be cutting their daily production of crude oil by one million barrels per day through February and March to keep prices elevated. So these are the key reasons why we're seeing the price of crude oil go up now. 


How are the taxes impacted on retail fuel prices?


what we're seeing now is that Beck says that, in fact, the largest component of our fuel prices across major cities, if we take the example of  Delhi, the price of petrol for example, from the refinery gate to the dealer is only around 32 rs/liter. But the price of the other taxes, the excise duty alone itself is about 33rs/liter more than the actual price.


Besides, this consumer are also paying the state tax-VAT, which is another Rs20.5/liter. This leads to us seeing taxes accounted for in the case of petrol in delhi around 170% of the base price of petrol, and this is mirrored across a number of cities in Mumbai the incidence of tax is higher from the state level, leading to even higher prices.


How does this situation compare with other countries?


So tax account for about 60 % of the pump prices of petrol, in particular in Delhi right now. this is largely comparable to some  extremely developed economies like Germany and Italy, where they account for about 65% to 62% but are significantly higher than taxes in countries like Japan, where taxes that are 45% and taxes in the US where they are around 20% of the pump price.


How has the tax revenue from petroleum products change over the years?


Tax revenues from the sale of petrol and diesel are a key part of receipts for both the center and the states. looking at the central receiptsenue the actual tax revenue from the sale of petroleum diesel was about 2.2 trillion rupees in FY 2020 and it was budgeted about 2.48 trillion rupees in FY2021. 


But due to the pandemic, the government raised taxes and it went up to around 3.46 trillion rupees and this is expected to go up slightly even further to 3.7 trillion rupees.


So that would make it over a 50% hike. If you're looking at budget estimates for the previous fiscal to this fiscal. the government is increasingly depending on petrol and diesel to make up for shortfalls across taxes, particularly in GST and other indirect taxes.


All of this only two parties are happy. The centre and state governments, both of which are starved of revenue and make money on every liter of petrol and diesel sold.


Also read: Essay on environmental pollution

Also read: Essay on pollution



 THANK YOU SO MUCH 



Comments

  1. I am very much pleased with the contents you have mentioned. I wanted to thank you for this great article. Petrol in diesel uk

    ReplyDelete

Post a Comment

Popular posts from this blog

Education should be free for everyone

Education should be free for everyone I think education should be free. Education is very useful in everybody's life. It is education that makes man the smartest creature on earth. It empowers humans and gets them ready to face the challenges of life. Education is the most significant tool in eliminating poverty and unemployment. If a poor and uneducated person can't live a good and healthy life,  but if he would be educated, he can live a happy and healthy life.  Education helps in making a person independent. Everyone deserves to be educated an educated citizen is a more productive citizen, therefore able to pay more taxes. I f education would be free, more children would be in school. It is unfair that only the parents that have money get to send their child to school. Every child must be given a chance because some children have that talent, but their parents don't have the money. In order to improve a country, all the people of that country must be educated.  

Independent India 75 self reliance with integrity essay in english

  Independent India 75 self-reliance with integrity essay  "Let's celebrate 75 years of independence, make a new India with integrity and self-reliance."  Our country India, which was called the golden bird in ancient times, was a slave of British rule for about 200 years. Our integrated freedom fighters liberated the country after a lot of struggle. Finally, we got independence on 15th August 1947 Today the country is completing 75 years of independence. There were many obstacles at the beginning of this journey of 75 years, but India did not turn back. The country kept on moving forward looking towards its goals. Today the country is continuously moving forward on the path of progress. Today there is no field in which India has not earned a name.  But this journey of 75 years was not easy at all. The country has worked hard to reach where the country is today. Today the country is progressing but corruption is a major obstacle in the economic, social and political progr

If I had been a gallantry award winner,what would I have done for my nation

If I had been a gallantry award winner, what would I have done for my nation Poem On Gallantry Award Winner|Veer Gatha Project Poem If I had been Vikram Batra, what would I have done for my nation? We will never forget the sacrifice of Vikram Batra, We cannot pay the price of blood Vikram Batra. Vikram Batra is the only gallantry, who laid down his life for our country. Vikram Batra says Guns is my wife flag is my life... Dont's mess up with me danger is my vibe. Like lion is my strive, Fundamental right I am deprived. He motivates me to join Indan Army, He says the best line Soiilder I am and I Choose to Fight.  Today I choose to die because I care for your life. Vikram Batra saves many life gave his blood and his precious life I want to become like Vikram Batra who devoted his whole life. The land is filled with beauty. This beauty to cherish all over to save our country it's my duty I want to become like Vikram Batra because India is my nation. India is my life... and India