Fuel prices in India should be similar everywhere. However, some contributing factors lead to the rise in the price of fuel in different parts of the country. Today, we will talk about some of the most important factors that lead to the high price of fuel in Arunachal Pradesh.
In recent years, the fuel price in Arunachal Pradesh has seen a steep rise. Quite a few contributing factors have led to this rise in prices.
Reasons behind the Rise in Prices of Fuel in Arunachal Pradesh in Comparison with Punjab
There are a lot of factors that decide the price of fuel in Arunachal Pradesh. Some of the most important ones are:
Network of Roads
Punjab is one of the states in the country which is well-connected via roads. Hence, in Punjab, it becomes extremely easy to transport fuel from the refinery to the dealers. Consequently, because the network of roads is much simpler, the cost behind the same is also extremely pocket friendly.
However, Arunachal Pradesh does not have great connectivity with most central parts of India where the refineries are situated. Hence, to ensure that the oil reaches here safely, investing in more expensive modes of transportation is extremely important. This is one of the major costs that add to the already high fuel price in Arunachal Pradesh.
Number of Dealers
It is quite simple mathematics; if there is strong competition in the market and there are many dealers to satisfy the demand, the prices will be favourable. This is the exact scenario with Punjab. The demand for fuel, in Punjab, is quite high. Moreover, this state has many prominent dealers in the field, and some more upcoming dealers are ready to invest. This creates a down surge in the pricing.
The situation in Arunachal Pradesh is, however, the reverse. There are only a few leading players in the market, which creates an issue of demand-supply. The demand is quite high, but the suppliers are less. Hence, it adds up to the fuel cost in Arunachal Pradesh and makes it quite high compared to Punjab.
Infrastructure and Maintenance Cost
When it comes to maintaining a refinery for oil in any state, it is extremely important to invest in the right infrastructure and constantly maintain it. In Arunachal Pradesh, the taxes associated with this maintenance is quite high. Also, electricity prices per unit and labour costs are extremely high. These small factors have a high impact on the pricing. Arunachal Pradesh does not have a promising network of storage; hence, this state faces a recurrent problem.
On the other hand, if we currently speculate on Punjab's scenario, it is much smoother than in Arunachal Pradesh. There is a wide availability of resources and cheap labour. This ensures that the infrastructure and maintenance costs are kept at bay and do not add up to the extra cost. Punjab has promising storage areas spread across wide land areas, which is a great bonus.
Demand Supply Structure
The population of Arunachal Pradesh is less than that of Punjab. However, there are not enough proponents and supply which can suffice this need.
On the other hand, the population of Punjab is much high. However, there is enough supply that tends to meet those needs. This does not create any inertia in the market and hence, it does not let the prices of fuel rise in Punjab.
The high fuel pricing in Arunachal Pradesh is also due to many national factors as well as the globally high price of crude oil, the rise in the value of US dollars, and many more. This soars the pre-existing fuel price in Andhra Pradesh and makes it more expensive than in other states. If you want more information on fuel prices and how it is higher in various states, remember to download the Park+ app and read to know more about fuel prices.