Low Crude But High Petrol & Diesel


Why Crude Price is so low ?

Recently due to Covid-19  low demand and over supply in crude oil made drastic fall in Brent crude oil. On 1st January, 2020 Brent crude oil price was 66$ per barrel which has fallen down to 27$ in march.

Oil prices jump on hopes for OPEC, Russia meeting on output cuts ...
Source
A question hit many young minds that as crude and petrol/diesel prices are directly related and whenever we see rise in crude prices result is hike in petrol and diesel prices too, but in today's scenario crude has fallen so much why ain't Petrol and deisel prices going down?


The Research 

High Price of Petrol & Diesel

Research showed that In India as on 16.3.2020 :-

petrol price diesel price Aaj petrol diesel ka rate 21 January 2020
Source
                                                                         
Petrol Base price was       - 27.96 Rs/lt
Adding freight charges     -  00.32 Rs/lt
Price charged to dealer     -   28.28 Rs/lt
Add : Excise Duty               -   22.98 Rs/lt
Add : Dealer's Comm         -   03.54 Rs/lt
VAT                                        -  14.79 Rs/lt. 

Making the price alomost 69.59 Rs/lt.


On 14th March 2020, Govt raised it's excise duty in petrol by 3 rs per liter.  (2  Rs Special additional excise duty and 1 Rs for Road and Infrastructure.

Why the government does this ?

The reason is for raising more fund to fill government treasury and hence working towards growth and development of the county


On 14th March, government raised it's excise duty by Rs.3. (Rs.2 as special additional excise duty and rs.1 for road and infrastructure but why government had to raise such duty when citizens were facing so many problems due to the covid-19 breakout.

The answer ks very simple to increase more income for governments. Example :- Rs.3 in excise duty can generate 40,000 Cr yearly revenue to govt.

Recently in finance bill 2020 Special additional excise duty is 18 rs and 12 rs in petrol and diesel respectively about to go 150% taxes.

Rajasthan govt raised their VAT by 4% from 30 to 34 now in petrol and from 22% to 26% VAT in diesel.

Pros it makes govt earnings more and so a better stronger economy and infrastructure in future.

Cons the people do not get any relaxation in their travelling expenses by such fall in crude prices ever.

Hence we cannot do anything for that and just hope govt to utilize such additional revenue for our and nations benefit.



Editor - Prasant shukla

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☆ Comment your views such raise in prices is good or bad.

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