Essay on Increasing Price of Petrol and Diesel | PDF

Essay on Increasing Price of Petrol and Diesel

Essay on Increasing Price of Petrol and Diesel (Download PDF) – In India, petrol and diesel prices can be seen increasing every day, and oil marketing companies keep revising oil prices every day. The prices revised by the oil marketing companies are updated every day by the retailers.

Whether the prices fall or rise, for a few years, there has been a continuous increase in the prices of oil. India has reached the highest level of oil prices here. Through this essay, we will know why and what is the reason that the prices of petrol and diesel increase.

Why do petrol and diesel prices rise?

Oil prices rise due to the international market

Due to an increase in oil demand and less production of oil in India, 84% of its domestic oil needs are met by importing crude oil. Therefore, crude oil prices have a direct impact on domestic fuel prices. Indian oil marketing companies revise fuel prices based on international market prices.

If the price rises in the international market, then it directly affects the Indian market and the price increases overnight.

Rupee-dollar exchange rate

The rupee-dollar exchange rate also has a major impact on purchasing crude oil in the international market. Indian oil companies do not buy oil in rupees, they have to buy oil in dollars but they spend in rupees. Therefore, whenever oil prices fall in international markets, Indian oil companies benefit, this is why the rupee is stronger against the dollar.

Whenever the dollar rises compared to the rupee in business. So the concern of oil companies increases. The fall in the rupee means that they will have to spend more in dollars to buy oil.

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Increase in Demand

According to data from the Petroleum Planning and Analysis Cell (PPAC) of the Indian Oil Ministry, there is a steady increase in the demand for oil. However, compared to the same period last year, this demand is 23.3 per cent less.

An increase in the number of vehicles in the large Indian population is being observed day by day. Due to which the demand for oil is increasing in the market, due to the low production in the country, the oil market completely depends on the import.

Central and State Government Tax

The increase in the price of oil that we see is actually half the price of oil. The main reason for the rise in oil prices is the tax imposed on it.

The central government levies excise duty on petrol and diesel and the state government imposes sales tax and VAT. It depends on the state and how much sales tax and VAT it imposes.

What is the effect of the increase in petrol and diesel prices?

Fuel costs

The rising prices of diesel and petrol have a direct impact on our daily travels. A middle class who goes to the office every day from his personal vehicle, the increase in fuel price directly affects his pocket. If he does not travel by his personal vehicle, he will have to pay the fare in public transport, which is an additional expense.

Unfortunately, this is a cost that we cannot do much about. If I have to spend a certain amount on fuel, I will either save less or I will have to cut back on other household expenses. If such high prices persist over a long period of time, it may affect other necessities or affect savings.

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Effect on essential items

The rise in diesel prices means a charge on the cost of freight and it rises across the country. In return, the prices of essential commodities such as vegetables, fruits as well as other commodities increase.

If the price continues to rise for a long period of time it has an inflationary effect. They can control it to some extent, but cannot control it continuously.

Foreign travel, education, and business expenses

This is an effect created by the rise of crude oil which is not directly visible to us. “Due to the rise in the prices of crude oil, mainly we put pressure on the extra expenses, as the price of oil increases, the cost of import increases, the deficit increases and the rupee comes under pressure.

Whenever someone plans to vacation outside India or for education, or business, the depreciation exchange rate will start to show an impact. Our expenses increase because travel expenses increase.

Conclusion:-

Government should take the necessary steps to overcome this critical situation. They should impose fewer taxes on petrol and diesel. So that people’s burden could be less to some extent.

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FAQs. on Increasing Price of Petrol and Diesel

Why are the prices of petrol and diesel increasing?

Answer – The main reason for the increase in prices of petrol and diesel is the fall of the rupee and increase in the price of crude oil, besides the central and state governments have to impose different taxes.

Will diesel and petrol prices come down in the near future?

Answer – It is very unlikely because the continuous increase in the price of crude oil and the continuous increase in tax by the central government and the state government, confirms this truth.

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