Petrol, Diesel Price Will Increase To New Levels In Coming Days? This Is What Analysts Say
Fuel prices are a sensitive subject throughout the world. It does not affect the lives of people who own automobiles, but also of people who don’t use any vehicle. It affects the cost of transportation involved in the movement of goods from one place to another. This invariably contributes to inflation of prices, everywhere. So, with that in mind, when a government decides to cut back on taxes, it alleviates some burden on the shoulders of normal citizens.
Recently, the Indian government also took similar steps by reducing some taxes. But It looks like, this reduction in prices might be short-lived only.
Reduction in prices might be short-lived
Recently, the central government of India took the decision to slash tax on petrol by ?5 and by ?10 on diesel on Diwali. It came as a much-awaited relief for people at large amid a string of relentless hikes in recent weeks. Many states have also announced a cut in VAT imposed on the two fuels.
But the joy of saving your money might just be a short-lived one with indications that prices may once again climb in the months to come.
“Whenever there is an imbalance in demand and supply, prices are bound to increase. The second reason is the lack of investment in the oil sector as governments are promoting renewable/green energy sectors like solar power. Crude oil will be more expensive in the coming months. In 2023, the price of crude oil can rise by ?100,” said energy expert Narendra Tanjea.
OPEC is causing the rise in fuel prices
86% of India’s domestic requirements are being fulfilled by foreign countries. Hence, the per barrel rate of crude oil in the international market has an impact on the price of the two fuels in India. Recently, the OPEC (Organization of the Petroleum Exporting Countries) has throttled the supply considerably. Reportedly, US President Joe Biden has also blamed OPEC and its allies for inflationary pressure.
Currently, per barrel oil prices remain at well over $80. Bank of America has even predicted that fuel prices might touch $120 come June of 2022. Because of this, fuel prices, are at an all-time high in many countries, including India where it could continue with its upward trajectory.
It should be noted that in a world recovering from the worst of the Covid-19 pandemic, revenue collection remains a priority. But high fuel prices may not auger well for economies.