petrol-diesel
A big update has come out regarding the prices of petrol and diesel in the country, which can be heavy on the pocket of the common man. According to the report of domestic brokerage firm Kotak Institutional Equities, after the end of the assembly elections, fuel prices may increase by Rs 25-28 per liter. Due to the rise in global prices of crude oil and increasing burden on the government and refining companies, it is considered difficult to postpone this decision. If this happens, the prices of petrol and diesel may reach record levels.
The prices of petrol and diesel in India may increase rapidly after the elections. According to the report of Kotak Institutional Equities, in the current situation an increase of up to Rs 25-28 per liter may be necessary. The report says that crude oil prices remain at around $120 per barrel, which is putting huge financial pressure on the oil companies and the government.
According to the report, government oil companies are facing losses of about Rs 27,000 crore every month. This situation cannot continue for long. At present, the government has taken steps like reduction in excise duty by ₹ 10 per liter and windfall tax, but these are only temporary relief, not a permanent solution.
Effect of war on crude oil prices
Global reasons are also important behind the rise in crude oil prices. The ongoing tension in West Asia and especially the obstacles in the Strait of Hormuz are affecting the supply. This is the reason why crude oil prices remain high in the international market. Its direct impact is visible on India. Although crude oil imports have declined by 13-15%, the total import bill has increased to $190-210 million per day due to higher prices. It is clear from this that the impact of increase in prices is outweighing the quantity.
The report also says that the increase in prices will not happen in one go, but can be implemented gradually, so that there is no sudden pressure on inflation. However, it will definitely affect the pockets of common people. If there is an increase of Rs 25-28 per liter, then the price of petrol in big cities of the country can reach close to ₹ 120 per liter. Its impact will not be limited to fuel only, but an increase in the prices of transport, logistics and everyday items may also be seen.
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