It is believed that after the Corona crisis, India’s economy is on the path of recovery. Due to this consumption of petrol, diesel and other sources of energy is also increasing.
But oil-producing OPEC (OPEC) countries, led by Saudi Arabia, have announced a cut in crude oil production, which could lead to hurdles in this path.
For economic development, the country not only needs to supply petrol and diesel without any hindrance, but they are needed at cheap prices, especially when India imports more than 80 percent of its energy needs.
After America and China, this country of 135 crore people has become the world’s third largest consumer of crude oil.
This week, Saudi Arabia has announced a reduction of 1 million barrels per day in crude oil production, while OPEC countries have decided to reduce the production of crude oil by 97 lakh barrels a day.
This is bad news for India. Being a big consumer of crude oil, India is not happy with this cut and it was expressed by the country’s oil and gas minister Dharmendra Pradhan at a press conference of the Atlantic Council think tank.
He later said in a tweet, “I emphasized the need for fair pricing, which is in the interest of both producers and consumers. Cutting production may not be the best way to encourage global economic recovery.”
Dharmendra Pradhan told OPEC Secretary General Mohammed Barkindo that this “contradictory” policy is creating confusion for the oil-buying countries. The minister said that India and other buyer countries had hoped to increase production of raw weights and reduce prices, but “OPEC’s decision will have to step up alternative energy sources.”
But OPEC Secretary General, Mohammed Berkindo, in response said, “The historic decision to reduce production by 97 million barrels per day was taken as an overall response to the unprecedented slowdown.” He claimed that whatever decision he takes, he takes the interest of countries like India.
In the last few months, the prices of petrol and diesel in India have increased rapidly. On Wednesday, the price of petrol in Jaipur was Rs 92.69 per liter, which was the most expensive in the country, while in Chandigarh, petrol sold at Rs 82.04 per liter, which was the cheapest.
These prices will increase further with the cut in crude oil production of Saudi Arabia and OPEC countries. Shaileja Narayan, an Indian-origin energy expert in Singapore, told the BBC that oil prices would rise in the coming months, which could cause more difficulties in the post-covid recovery phase, and that the effect would be that many things, including petrol and diesel, would be expensive. Will go. “
Shaileja says that the reduction in oil production is not the only reason for the increase in the prices of petrol and diesel.
She says, “Consumers get petrol and diesel at different prices in different states in India. This is because state governments and local administrations impose different taxes on energy. Crude oil is not very expensive in foreign markets If in India, petrol and diesel are being sold at expensive prices, then a big reason is these taxes imposed on them. “
Why are prices soaring?
It is obvious that many things work in fixing the prices of petrol and diesel. These days the excise duty imposed on petrol is 21 rupees per liter, which according to many experts is very high. If this is reduced, then the price of petrol in the country can be reduced.
State governments and local administrations levy Value Added Tax or VAT. In cities like Mumbai and Delhi, this tax is very high, as a result of which petrol and diesel prices are very high in these cities.
Apart from these, the daily increase in prices of petrol and diesel is also due to many other reasons.
According to Shaileja, in India, petrol prices are decided on the basis of international prices by oil companies like Indian Oil, Bharat Petroleum and Hindustan Petroleum. Therefore, when the prices of crude oil increase internationally, the prices of petrol in India increase.
On the other hand, if the prices of crude oil fall in international markets, then we see a decline in the prices of daily petrol.
Oil is much more expensive in India than in neighbouring countries like Pakistan, Bangladesh and Sri Lanka. The prices of petrol and diesel were earlier subsidized by the government, but for the last few years it has been linked to market prices.
Modi government has continuously increased excise duty on petrol in the last few years, due to which petrol and diesel have become expensive.