The fall in ‘rupee value’ has been declared as the chief cause of the fuel price hike by the Government. The value of Rupee has dropped to an all-time low and the rupee-dollar exchange rate now is Rs 71.42 to a dollar on the 31st of August. Which reveals that India had to import 82 per cent of its fuel requirements at around $77.06 which is obviously a very high rate in today’s date thus taking fuel prices to an all-time high i.e. Rs 86.56 per litre for petrol and Rs 75.54 per litre for diesel in Mumbai.
According to the Union Minister of Petroleum and Natural Gas, Dharmendra Pradhan, the obscure policies of the US is solely responsible for the ‘unusual’ rise in fuel prices in the country. Due to authorization of US on Tehran, India is bound to reduce its imports from Iran, hence reducing the total fuel availability in the country and this episode took place at the time when India had increased its crude oil imports from Iran by 52 per cent in June 2018. Amongst the (OPEC)Organisation of the Petroleum Exporting Countries, Iran is the third biggest producer of crude oil.
According to the Reuters survey, the output from the OPEC has risen by 220,000 barrels per day(BPD) in August 2018 to 32.79 million barrels per day(BPD). The most influential factor which could largely hurt the oil demand is the trade disputes between the US and other major economies including China and the European Union if they are not settled soon.
According to the sources, there is an increase of around Rs 5 per litre in the fuel prices in the past 7 months. While the excise duty has been kept constant for the past four months. Agitation amongst several Transport-union was seen in July because of the VAT applied on petrol and diesel. The VAT applied on diesel today is Rs 10.12 per litre and that on petrol is Rs 16.42 per litre. The union demanded to the government to bring petrol and diesel under the ambit of GST.
The hard-pressed Indian motorists
The splendid increase in the prices of petrol and diesel have suppressed motorists and they ought to pay the demanded price which has greatly influenced their wallet and this is happening for the past year or so. The poor condition of roads in the monsoon has also a good contribution which led them to tank up their vehicles more often.
On the other side, as per the government release, the majority of fuel refineries in the country had failed to meet the production targets in the month of July.
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Diesel Price Reached Closer To That Of Petrol
The difference in price between petrol and diesel has also reduced to one of the lowest this year in Mumbai, which is Rs 11.02 per litre. which means a petrol car’s operational benefit seem to have as good an as the diesel ones.