The central government has increased the excise duty on petrol to Rs Many states, including, Delhi, Maharashtra, Tamil Nadu, and Karnataka have also hiked state levies on petrol and diesel since the beginning of the fiscal to boost revenues. Petrol price in Delhi rose by The CPI inflation for the same period was 7. Excise duty levied by the Centre is the biggest component of the price of petrol in Delhi See Table 1.
Since , the revenues collected by the Centre from the sales of petrol and oil products have nearly doubled see Table 2. The base price of petrol is less than a third of the price at which a buyer in Delhi gets it from the retailer.
Click here to join our channel indianexpress and stay updated with the latest headlines. Karunjit Singh Nushaiba Iqbal Must Read. Home Explained Explained: Here is why petrol and diesel prices are rising Explained: Here is why petrol and diesel prices are rising Since India imports most of the fuel required to meet its demands, the price of fuels rises in tandem with global prices.
What is causing petrol and diesel prices to rise? Also in Explained With markets at record high, should investors book profits? Coronavirus Explained. Click here for more. The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards. Tags: Explained Economics Express Explained. More Explained Conjugal rights before SC: On what grounds is it being challenged, how have courts ruled before?
What are zero-click attacks and how do you get the better of them? In my view petrol must sell at max. On the international front, for example, OPEC Organization of the Petroleum Exporting , countries decided to cut down oil production by 10 million barrels a day, hoping to boost energy prices. Increase in petrol prices will impact the cost of production and manufacturing on energy input industries.
Given that almost every industry is driven by energy, he cost of which ultimately boils down to the consumer. This will ultimately have a negative impact on the scale of production. This may prove counter productive if the prices increase further leading to a collapse in demand. Usually, when fuel prices go up, we see an inflationary impact and depreciating exchange rate.
This will impact anyone owning a business which involved foreign currency. An industry insider who wishes to remain anonymous has noted:. Since all the trucks run on diesel, it will increase the freight cost, which in turn finds its way to increasing price of food grains, goods and other products. The rising cost of diesel will thus hurt the common man. Most of the public transport systems run on diesel in most cities.
The bus ride cost will go up. Over and above, India is at a retail inflationary high of 7. The increasing gap between job losses and rising prices can be deadly for the economy and the economy. The price rise may lead to some hardship on the part of the consumer. However, taxation is an important part of welfare state, and the impact of a higher tax will be seen in the long run.
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