Over the last three months, India has been witnessing fuel price hike on daily basis. So much so that some places in the country are even paying Rs 120 per litre of petrol. People have been taking on the fuel price hike for long time and they not questioned the government over its intent, while they believed that the price of one litre of petrol will touch Rs 200 very soon!
Fuel price is directly affecting country inflation and has been the reason for price increase of all the goods from edible oil to electronic goods; the prices have skyrocketed since last three years. Despite all these, the people are accepting it as a way of life and living with the increased price.
But the Union government seems to have sensed trouble with continuous price hike of fuels and with line-up of states going for polls over the next one year, it seems the Bharatiya Janata Party (BJP) led NDA government at the centre has decided to cut fuel prices by reducing the centre’s share of excise duty by Rs 5 and Rs 10 for a litre of petrol and diesel respectively.
The Union government had also suggested to states to reduce fuel prices from their end. Few of the BJP ruled states, mostly which heading for elections in the coming months, have jumped into the bandwagon and have reduced the prices, while others are still to react on reducing state value added tax (VAT). Tamil Nadu has reduced VAT on fuel almost three months ago and set an example for all the states. But with pandemic and lockdown, most of the states’ treasuries are empty and they are not ready to take the risk of losing out income!
But the joy of saving your money might just be short-lived, say energy experts and suggest that there are indications that prices may once again climb in the months to come. Whenever there is an imbalance in demand and supply, prices are bound to increase. The second reason is the lack of investment in the oil sector as governments are promoting renewable/green energy sectors. This will make crude oil more expensive in the coming months. And one might not be surprised if the crude oil per barrel might touch $200 mark!
Currently, per barrel oil prices remain at well over $80. According to Bank of America, the fuel prices might touch $120 come June of 2022. With this trend likely to happen the fuel prices are at an all-time high in many countries, including India where it could continue with its upward trajectory!