Petrol-diesel can be expensive by up to Rs 25: Government can give relief by cutting tax, after 8 years, crude oil crosses $110 again

Crude oil has flared up due to the ongoing war between Russia and Ukraine. In the global market, the price of crude oil (Brent crude) has increased to $ 110 per barrel. Meanwhile, the International Energy Agency (IEA) has warned of an escalating energy crisis in the world. The supply of crude oil from Russia was affected due to the Russo-Ukraine war. Due to which the price of crude reached the highest since 2014. Due to this, the price of petrol and diesel can increase by up to Rs 25 per liter in the coming days.

Crude oil is not being supplied as per the global agreement. IEA members, including Japan, the US, have prepared to release 60 million barrels of oil from their reserves, but this is less than a day’s oil consumption. In such a situation, the price of crude oil may increase further in the coming days. The IEA has said that the US has released 30 million barrels of oil from its oil reserves into the market. However, as the consumption of oil is increasing around the world, the oil kept in reserve will not be enough for this. Before Corona, 100 million barrels of oil were being consumed daily worldwide.

Crude oil can go up to $ 150
Global firms Goldman Sachs, Morgan Stanley and JP Morgan have predicted crude prices. According to these agencies, the price of crude oil can soon cross $ 150 per barrel. Although Russia has slashed its crude prices to record levels, no one is buying it due to sanctions imposed by the US and Europe.

Prices are stable since 119 days
Trends show that there has been no increase in the prices of petrol and diesel in the country for the last 119 days. Whereas during the same period, the prices of crude oil have increased sharply and it has reached the highest level of two months.

Petrol and diesel prices may increase by up to Rs 25
Anuj Gupta, Vice President (Commodity & Currency), IIFL Securities says that in the coming time, the price of crude oil in the international market has crossed $110 per barrel. At the same time, the oil companies have not made any change in the prices of petrol from November 3. But since then, crude oil has become more expensive than $ 33 per barrel. Not only this, it may continue to accelerate in the future as well. In such a situation, the prices of petrol and diesel may increase by up to Rs 25 in the coming days.

According to Prashant Vashisht, Vice President and Co-Group Head of rating agency Icra, petrol and diesel prices in the country increase on an average by 55-60 paise per liter when crude oil becomes costlier by $1 per barrel.

Prices may increase after elections
Experts say that after the ongoing assembly elections in 5 states including Uttar Pradesh and Punjab, the common man may get a big setback on the inflation front. The results of the assembly elections are to come on March 10, after which petrol and diesel can become expensive. Because it is generally seen that oil companies do not increase the price of petrol and diesel during elections.

Government may cut excise duty
Experts believe that in order to control inflation, the government can cut the tax excise duty on petrol and diesel. In the first wave of Corona, the central government had increased the excise duty on petrol and diesel by Rs 15 per liter twice. However, after this on November 3, excise duty was cut by Rs 5 per liter on petrol and Rs 10 per liter on diesel.

92 thousand crore loss to the government
It has been said in the Icra report that if the government cuts the excise duty on petrol and diesel and brings it to the pre-corona level, then the burden of about 92 thousand crores will increase on the exchequer. The price hike is believed to be fixed after the elections are over on March 10. In such a situation, the government has the option of cutting excise duty to bring control on the price. Otherwise, inflation will become uncontrollable.

maths of tax on petrol and diesel

Note: These figures are according to the price of petrol and diesel in Delhi on March 2.

India imports 85% of its crude oil requirement
We procure more than 85% of our crude oil requirement from outside. We have to pay for it in dollars. In such a situation, due to the rise in the price of crude oil and the strengthening of the dollar, petrol and diesel start becoming expensive. Crude oil comes in barrels. One barrel, that is, 159 liters of crude oil.

How is the price of petrol and diesel determined?
Till June 2010, the government used to fix the price of petrol and it was changed every 15 days. After 26 June 2010, the government left it to the oil companies to decide the price of petrol. Similarly, till October 2014, the price of diesel was also fixed by the government, but from October 19, 2014, the government handed over this work to the oil companies.

At present, oil companies determine the price of petrol and diesel daily keeping in mind the price of crude oil in the international market, exchange rate, tax, transportation cost of petrol and diesel and many other things.