Petrol and Diesel Price on Record High: Petrol and diesel are continuously setting new records in the country. Today, on January 23, the price of petrol in Ganganagar, Rajasthan reached Rs 97.47 per liter, that is, very close to the price of Rs 100 per liter. Diesel is also priced at Rs 89.19 per liter. The biggest reason for the rise in the price of oil in India is heavy tax because the rates of Brent crude oil are running around 50 and cheaper oil is being sold from India in neighboring countries. Out of the price we pay for oil, 62 per cent is taxed. There is little hope that oil will soon become cheaper because after the introduction of the corona vaccine, now everything is coming back on track, then the consumption of oil will increase and as a result its demand will increase.
About three years ago, when Brent crude oil was at a price of about $ 75 per barrel, there was also petrol near Rs 75 per liter. At the moment the crude is close to $ 50 per barrel, the prices of petrol are increasing to Rs 100 per liter.
Petrol will soon cross 100
Economic activity is expanding after the introduction of the Corona vaccine. Due to this, the demand for oil will increase. Regarding this, Anuj Gupta, Vice President (Commodities and Research), Angel Broking, says that by the first quarter of 2021 this year, by March, the price of one barrel crude can go up to $ 55. According to Anuj Gupta, if the price of crude increases, petrol prices can soon cross 100 because now almost all companies, schools, colleges and transportation have started, then its consumption will increase. At this time also, due to increasing consumption of oil, its price is gaining momentum.
Crude price up to $ 60 a barrel by June
According to the US Energy Information Administration (EIA), by the first half of June of 2021, Brent crude prices could go up to $ 60 per barrel. The EIA estimates that the Organization of Petroleum Exporting Countries (OPEC) and allied countries (OPEC Plus) may limit oil production under the partnership. Saudi Arabia has announced that it will cut oil production by one million barrels per day in February and March. Despite this cut, the EIA estimates that OPEC will produce more oil this time than last year and 272 million barrels per day in 2021 this year, compared to an average of 25.6 million barrels per day in 2020.
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Consumption signs showing the decline in Gold-Crude Ratio
According to Kedia Commodity Director Ajay Kedia, the economy is expanding and its signal can be seen from the gold-crude ratio. In this ratio, gold means uncertainty and by the economic expansion of crude, that is, if the ratio is high then the economic uncertainty is increasing and if the ratio is low then the economic expansion is happening. Crude consumption increases in economic expansion. The ratio was 91.12 in April 2020, when there was a global outbreak of Corona epidemic and crude prices went to the lowest level. However, gradually the economy started coming back on track and economic activity increased.
At this time the ratio is 35.12 i.e. the consumption of crude has increased. This ratio was 24.94 in December 2019 and 30.66 in January 2020. According to Ajay Kedia, the reduction of this ratio means that there is no longer any possibility of economic uncertainty among people and economic expansion is taking place. Due to increasing consumption, its price is gaining momentum.
We pay 62% tax for petrol
Oil is so expensive because the tax on it is high. The retail price of petrol in the capital of Delhi was Rs 84.7 on January 16. If you break it up, then the base price will be Rs 28.13 and the cost of rent (freight) is Rs 0.37 i.e. petrol is Rs 28.5. After this, dealers have to pay excise duty of Rs 32.98 and VAT of Rs 19.55 (includes VAT on dealer commission). The average commission of the dealer was Rs 3.67. Adding to all this, the price of petrol was Rs 84.70 per liter on 16 January 2021. In this way, a tax of Rs 52.53 was levied on one liter of petrol i.e. 62 percent.
In 2018, the central government gave relief in excise duty
The biggest challenge before the central government is to get rid of the inflation of oil. People urged the government to cut taxes. Earlier in October 2018, when oil prices reached a record high, the government had reduced excise duty on petrol and diesel by Rs 1.50 per liter. Apart from this, the government oil companies also gave relief to the people by deducting an additional one rupee per liter. However, this time there is no hope as the government needs revenue to handle the economy badly affected by the corona epidemic. Earlier this week, oil minister Dharmendra Pradhan blamed Saudi Arabia’s decision to cut oil production over rising oil prices.
Cheap petrol from India in neighboring countries
According to the data given on gasoline petrolprices.com, cheaper petrol is being sold from India in neighboring countries. Petrol prices have been given on the website on 18 January. On that day, petrol in India was priced at Rs 87.87 per liter. Comparing this with neighboring countries, on January 18, per liter was Rs 49.87 in Pakistan, Rs 49.56 in Bhutan, Rs 61.37 in Sri Lanka, Rs 68.84 in Nepal, Rs 74.14 in China and Rs 77.01 in Bangladesh. In all countries, the price of petrol has been changed to Indian rupee. The cheapest petrol in Venezuela was sold at Rs 1.46 and in Hong Kong, it was Rs 172.66.
Talking about diesel, on January 18, the price of diesel was Rs 79.29 per liter. Talking about the neighbouring countries, the price of diesel per liter was Rs 39.64 in Sri Lanka, Rs 46.31 in Bhutan, Rs 51.7 in Pakistan, Rs 56.25 in Bangladesh, Rs 58.20 in Nepal and Rs 64.54 in China. The most expensive per liter diesel sold in Hong Kong for Rs 145.38 and the cheapest in Iran for Rs 8.75.
