The year 2021 is likely going near the year end. The year only has just one month to go, and now everyone is starting to look back to the important things happened in the year. When we look into the important things happened throughout in INDIA, and in Indian economy, the most important news is the century of Fuel price. Towards the present days, the fuel price has gone more than 100 rupees in almost all the metro cities of the country. Also, the fuel rate is creating several imbalances in the total economy of the nation.

From February 2021 itself, the fuel price is increasing almost in all day. By the days now, the price has crossed century in many of the states like, Maharashtra, Madhya Pradesh, Rajasthan, kerala etc. this hike increases the price for all needy things in the country. But when we take the rate of petrol in all the South Asian countries, India holds the first place for the price amount. The petrol rates in our nearby countries are:

Bhutan: 49.56

Pakistan: 51.14

Sri Lanka: 60.56

Nepal: 68.98

China: 74.74

Bangladesh: 76.41

Also, we can find that the petrol is providing for Rs. 1.45/ litre in Venezuela.

Why fuel price is high in India?

The main reason behind the fuel price hike is the tax imposed upon the fuel. 63% of the value is considered as tax, including two taxes like- Excise Duty and Value Added Tax. The major portion of the petrol rate is collected by the Central Government, in the name of Excise Duty. When we look in to the statistics, the excise duty on fuel has increased double from 2014 onwards.

The tax imposed on the petrol price made by centre, along with the commission for the dealer is collected as Value Added Tax. It is taken by every state in the country. This also can vary from state to state. This variation is the reason behind narrow differences of price in all states.

The main use of petroleum products is as fuel for transportation and to run machineries in factories. Petroleum products are natural fossil fuels which should be taken from the big underground reservoirs. Only a few numbers of countries have the wealth of petroleum products. In India, 84% of the using petroleum products are imported. Also, India holds third place for consumption of crude oil in the world.

This is the main reason behind the sudden increases of price in the country. The price will automatically go high if the global price is rising. When we look into the statistics of number of vehicles using in India, we can find out that the usage of private vehicles are increasing day by day. This created a high demand for petrol and diesel in India, which forces to import more products.

But the Government is stating that, the increase is inevitable, because the global price for crude oil is also increases, especially after the outbreak of the pandemic and lockdown in April 2020. Also, the producing countries of oil are now shutting the production due to pandemic and lack of labour power, which in turn hikes the price globally. Government is considering the increase of fuel cost, as a remedial method to overcome the revenue loss of lockdown period. Both central and state governments depend fuel price as a way for revenue generation, to continue the infrastructural development within the territory.

But however, the most affected people are the poor and middle class section in the country. People who have faced severe results of lockdown are again affected through this price hike. The fuel price also creates increase of price for all day to day commodities and services. This also creates huge imbalance in the life of common man in the country. In order to make a permanent solution to this pathetic economic condition, we must find out better optional methods to reduce the usage of petroleum products.