The fluctuations in fuel prices are not foreign to a country like India. Considering the pandemic and the financial burden it cost our country, there have been speculations about fuel prices reaching their epitome in the coming years. However, the states of India have had a varied approach regarding the same.
With different states acting up differently in terms of the VAT or other related charges, the fuel prices may vary according to each state. As alarming as it sounds, the state of Assam recently faced the slap of price hikes since the different oil companies in the areas decided to increase the price of petrol and diesel by 50 paise (starting June 3, 2023). In this discussion, we'll highlight some of the reasons why fuel prices are so high in the state of Assam as compared to Haryana.
As per our sources, the revised rate of petrol in Assam post-hike is INR 97.54 per litre, whereas diesel costs INR 90.23 per litre.
The price hike in fuel started at the start of the new financial year. The budget so announced added to the prices of different sectors, including power, toll gate tax, medicines, cooking gas, and petrol/diesel. Of these, the fuel prices have been observed to go up all-time in Assam, as opposed to Haryana.
Statistically, the price of a 19 kg commercial cylinder is about INR 2398 in Assam, which is a result of the multiple increments and fluctuations in the price of the fuel.
To understand why the rise of fuel prices is happening differently in different states, we need to first understand the factors that determine this change. Three factors majorly contribute to the increase in prices: Namely VAT (decided by the state government), taxes from the central government, and transportation or distribution costs. The taxes from the government (both Central and the State) are about 152% of the price of the fuel offered to the dealer.
Here's a list of factors that have changed in the past few years (especially in the case of Haryana and Assam), leading to the fuel price rise in Assam.
The government of Haryana has tremendously reduced the VAT on petrol and diesel processes to reduce the oil prices in the state. As a result, the price of petrol went from 106.94 INR to 95.27 INR; and that of diesel went from 98.60 INR to 86.51 INR. These prices are significantly lower than that of other states like Assam.
On Diwali last year, the Central Government announced a reduction in fuel prices, which directly contributed to the lower fuel prices as a result. But along with other factors like VAT and distribution/transportation costs, the prices have still been spiking in the states of Assam, majorly due to the decisions of the state government.
When importing fuel from OPEC countries, the Indian Government ensures that the fuel reaches the common man at the same taxes even when the source price is high. This is even truer for the case where fuel prices from the source are lower. This difference is used to fill up the fiscal deficit of the government.
In short, no matter what the source price of the fuel imported is, the price of fuel is always rising in India. In particular states like Assam, where the state government decides to increase their VAT, the prices go even higher. Moreover, the unsaid cost of transportation and distribution is all the higher here, hence adding to the overall cost.
With such alarming rises in fuel prices, the common man is under huge pressure. However, we at Park+ are trying to streamline and minimize your efforts when it comes to fuel prices information, assistance with parking to save fuel, and any other car-related services.
Our thriving efforts to become your partner, and not only a car assistance organization, have made it possible for us to bring our solutions to you as handy as possible. For the same, we have our Park+ app and website for all of your car-related problems. Feel free to download the app and keep it all handy!