The price of fuel in Andhra Pradesh as well as in Karnataka, is quite high, which is also the situation in the rest of the country. However, if you compare the price of fuel in Andhra Pradesh with the price in Karnataka, you will see that there is quite a bit of a gap between the two. Why is that so?
Many people might need clarification as to why there is such a parity between the fuel prices in two states that are so close to each other. Usually, there are a lot of factors that create a global disparity; however, there are instances that could contribute to price differences in states as well. The fuel price in Karnataka is lesser than in Andhra Pradesh, and there could be a lot of reasons behind it, as stated below.
Factors that Lead To Higher Fuel Price In Andhra Pradesh Than Karnataka
Usually, many factors lead to the higher fuel price in Andhra Pradesh than in Karnataka. Some of the most important factors in this case are:
1. Government Levied State Tax
The state tax is one of the most important reasons why the fuel price in Andhra Pradesh is more than that of Karnataka. The state government of every state is different. Hence the policies formulated by them are also extremely different. The Andhra Pradesh government has currently levied a higher state tax than Karnataka. This is one of the major reasons why the people of Andhra Pradesh have to pay a higher fuel price when compared with Karnataka.
Even after the centre had brought down the fuel prices, the state tax did not decrease and remained higher. If the government needs to bring more policies for lowering the state tax, Andhra Pradesh will continue to have such a surge in the fuel price.
2. Inability to Channelise Distribution
The state tax is among the most important factors when deciding the fuel price in Karnataka or Andhra Pradesh. However, another very important factor is its distribution in the state. It is quite a misery to say that the structure of Andhra Pradesh could be better developed than Karnataka, creating a higher price.
If the distribution channel is promising, one does not have to go through many steps, which will automatically bring down the cost. However, the distribution channel is filled with fraudulent activities and the popular "fuel mafia"!
3. Higher Rate of Exchange
The higher rate of exchange is a consequence that not only Andhra Pradesh but every state has to go through. However, the problem is that Andhra Pradesh already has a higher fuel price. Hence, it will automatically impact the fuel price in Andhra Pradesh and make it higher than it already is.
Fuel is always valued in US dollars, and with the same value going much higher than the Indian Rupee, fuel becomes more expensive. This has a detrimental effect on the states that already have a higher state tax rate.
4. Haphazard Transportation System
After the fuel has been imported, it has to go through different channels so that the transportation is smooth enough. However, if the transportation system is not smooth, it will also impact the cost.
The fuel price in Andhra Pradesh is higher because of the faulty transportation system. As a state, it has to pay a higher cost, contributing to the surge in fuel prices.
5. Faulty Retailer Pattern
And finally, one of the most important problems in Andhra Pradesh which is probably the major reason behind the rise of fuel prices is the retailer pattern. The state has an official system, making it difficult for retailers.
This is, however, different from Karnataka. As a state, Karnataka follows an extremely clean retail system, so the prices are lower. Andhra Pradesh has very few leaders in the field who can provide the best quality fuel. This is one of the major reasons why the fuel price in Andhra Pradesh is much more.
Indeed, there need to be more trusted sources in the market to provide you with the right information about fuel prices and conditions. You can download the Park + app if you want authentic information. The only thing you will need to do is download the app, which will give you all the real-time updates. Using the app is also quite simple!