Will petrol price in India continue to rise?

Perhaps till December and January (2019) when 4 states are going on the election - Mizoram, Rajasthan, Chhattisgarh, Madhya Pradesh, the last ones before General Election 2019.

 

It’s quite worrying that even with how the central government manipulated the petrol and diesel price just to, in a way, entice voters in BJP’s favor in Karnataka, many people are still taking this lightly. It’s no joke. In fact, it is no less heinous than handing voters a sum of money during election season.

 

Imagine, they do this during the upcoming general election 2019. If people are so easily manipulated with the change in fuel price, BJP can certainly pull the strings to lower the petrol and diesel price and sell this move in election campaigns. And not just that. If such tactics deliver good rewards for the party in power, as we saw in the Karnataka Election, BJP wouldn’t exactly stop with just the fuel price. They can deflate the price of many consumer goods. The new Finance Minister Piyush Goyal is more likely to do such things than former FM Arun Jaitley—regardless of how much unemployment the deflating measure causes. Because unemployment is already India’s biggest problem today, yet no one is really talking on it; no one would care more if it increases even more. By reducing the price of products, the sold-out media will go gaga over it, eventually making viewers believe that BJP is a Messiah.

 

I am not being cynic—just realist. How easily BJP used fuel price to manipulate the voters of Karnataka, they can do that on the national level for the upcoming general election 2019. (Remember, for three weeks before Karnataka election, the price of the fuel didn’t increase even the slightest.)

 

Also read:- What is the average mileage of Tata Nexon (Petrol variant) on Highways?

 

It’s a smart move on their part. But worrying for the rest. If people make voting decisions on the basis of consumer goods’ price, the party in power can easily use this tactic every time to come in power. This tactic is more effective in appealing the poor people and working-class families—both of the segments aren’t the BJP loyalists.

 

So, here’s what will happen now about the petrol and diesel price:

 

·        Petrol and diesel price has risen across Delhi, Kolkata, Mumbai, and Chennai for 5 straight days. And if what analysts say are to be believed, this upward price trend will continue for more days.

·        The government will continue adding income to its pockets by ineffectively pricing not just the fuel but other consumer goods as well.

·        As we approach the end of December and start of 2019, we would see the prices of all these items going down gradually.

·        The BJP and RSS led government will announce a range of subsidies and concessions in the runner-up to General Election 2019.

·        The media – that never talks about the rising price – will start talking obsessively about the falling price. This will create a perception in the minds of voters that BJP has done a great job.

·        And hence a lot of votes will go to the BJP.

 

Again, some may call this a cynicism on my part, but believe it that it’s a well-thought strategy on BJP’s part. At a time, when petrol and diesel price is low across the world, we are selling the fuels by as high as Rs 25 per liter. Why? The ruling party has this room of Rs 25 to manipulate the voters.

 

With all these developments happening, even if you’re an apolitical person, you should definitely get worried about what’s going to happen as we approach general election 2019.

 

Petroleum cost = cost (securing + refining + showcasing) + charge (focal + state)

Cost = f(international rough cost)

Global Crude Price = f(Supply, Demand, Government approaches, Financial Institutions, Geopolitics)

Global unrefined cost is rising, along these lines cost is rising accordingly expanding the petroleum cost.

What is government doing about it?

Giving the worldwide value ascend to the shopper gradually since it needs to move towards advertise decided cost.

Would this be able to value rise be controlled?

Truly and No.

Truly, if government is happy to lessen its incomes from the duties on oil No, on the off chance that it chooses to pass on the cost increment and keep up its expense incomes.

Will the legislature decrease its assessment incomes?

No, since oil incomes structure a significant piece of government incomes (~35%) and there is no substitute to this income in the short run.

So in the transient petroleum will undoubtedly increment.

Why just petroleum cost is expanding when contrasted with diesel, LPG, Kerosene?

Since the purchasers of petroleum are mostly center and higher classes (according to salary or consumption), in this way these shoppers have higher capacity to retain value rise.

Why not diesel and Kerosene?

Food costs are legitimately attached to diesel costs. Lamp fuel is primarily utilized by rustic poor. So their capacity to ingest the value rise is lesser.

Consequently the administration decides to pass on the global value ascend (without decreasing its duty incomes) in petroleum first.

It is a common knowledge that a fuel price generally depends upon the global crude oil prices and the fluctuation in global prices will make impact on the price you pay at the petrol pump. Besides this there are several factors which make impact on the crude oil prices like demand and supply, Exchange rates etc . In the last three years it has been a monumental decreased in crude oil prices , on May 2014 when the new govt took charge the crude oil barrel cost to Rs 6330 approx which by Sep 2017 had almost halved to Rs 3368. Besides this, the govt also has levied central excise duty and vat on this, this taxes finally goes into the consolidated fund of india which are used for various welfare schemes. Earlier the govt also used to give subsidy on petrolium products which had also made impact on price of these products. Now the present govt has stopped such subsidy. Earlier the price of these products were revised on 1st and 16th day of every month but from june 16 it has been revised on daily basis. After the implementation of these policy of daily revision the prices of petrolium products in the international market has been started increasing that's why the prices are increasing day by day

Petrol price in India is directly related to global crude oil price. Crude price is governed by supply demand mismatch. More the supply, lower is going to be the price. More the demand, higher is going to price.

In current scenario, there is a huge raise in supply of crude due to new means of production from shale resources, especially in United States.

Usually, OPEC countries used to respond to these sort of falls by cutting production of crude. This time they are not cutting production in order to bleed off investment in shale assets by American companies.

t's true Govt of India has deliberately kept Petrol (Motor Spirit as is called in India - MS). As of date MS or all Petroleum products are out of GST. Which means both centre & state govts levy different taxes on petroleum products. If u take cost + nominal profit of MS as ₹ 35–38 per Lt. almost ₹40 p/Lt is taxed by both centre/state. State taxes on Petrol are as high as 27 to 30% of base price of say 35.

Govt of India , use this substantial tax revenue on Defence, DRDO, Space research, budget cover etc. etc. Lack of this , would have kept our country’s defence itself in ?. Defence requirements since independence hv grown multi fold & is not coming down. More so imminent Chinese threat make us to spend more or ever increasing defence outlay.

t's true Govt of India has deliberately kept Petrol (Motor Spirit as is called in India - MS). As of date MS or all Petroleum products are out of GST. Which means both centre & state govts levy different taxes on petroleum products. If u take cost + nominal profit of MS as ₹ 35–38 per Lt. almost ₹40 p/Lt is taxed by both centre/state. State taxes on Petrol are as high as 27 to 30% of base price of say 35.

Govt of India , use this substantial tax revenue on Defence, DRDO, Space research, budget cover etc. etc. Lack of this , would have kept our country’s defence itself in ?. Defence requirements since independence hv grown multi fold & is not coming down. More so imminent Chinese threat make us to spend more or ever increasing defence outlay.

t's true Govt of India has deliberately kept Petrol (Motor Spirit as is called in India - MS). As of date MS or all Petroleum products are out of GST. Which means both centre & state govts levy different taxes on petroleum products. If u take cost + nominal profit of MS as ₹ 35–38 per Lt. almost ₹40 p/Lt is taxed by both centre/state. State taxes on Petrol are as high as 27 to 30% of base price of say 35.

Govt of India , use this substantial tax revenue on Defence, DRDO, Space research, budget cover etc. etc. Lack of this , would have kept our country’s defence itself in ?. Defence requirements since independence hv grown multi fold & is not coming down. More so imminent Chinese threat make us to spend more or ever increasing defence outlay.