The cost of fuel changes daily across India. A revised rate of fuel is updated in the morning hours every day. A lot of factors, including global crude oil prices, contribute to the daily fluctuation in fuel prices.
The fuel prices also differ from state to state within India and a variety of factors influence this variation in fuel prices. For example, the fuel price in Arunachal Pradesh is different from the fuel price in Bihar. The factors that cause this variation mainly include varying transportation costs and local taxes, though other factors also exist.
Read on to know more and understand the various factors that make fuel prices costlier in Arunachal Pradesh than in Bihar.
Factors Why Fuel is Costly in Arunachal Pradesh Than Bihar
Various factors are responsible for making fuel costly in Arunachal Pradesh in comparison to Bihar. Here are the factors accounting for the difference in fuel prices between Arunachal Pradesh and Bihar.
Government taxes
State taxes and VAT always make a difference when deciding fuel prices. While the central taxes are the same across India, the taxes imposed by the state governments vary.
Arunachal Pradesh and Bihar have different tax structures. The state government tax and VAT on petrol and diesel for Arunachal Pradesh are greater than the state government tax and VAT on fuel prices for Bihar. Hence, the retail price of fuel in Arunachal Pradesh is higher than that in Bihar.
Geographical features
A place's geographical location greatly contributes to the fuel price. As far as Arunachal Pradesh and Bihar are concerned, they have a huge difference in geographical features.
To clear your doubt, the geography of a state determines its transportation facilities and network. Improper transportation network increases transportation costs, which adds to the fuel price.
Considering this, you must know that Arunachal Pradesh has hilly areas and rough terrains. It makes the crude oil and fuel transportation difficult and costly. On the other hand, Bihar benefits from a well-established fuel transportation network, thus making the fuel price in Bihar lower than the fuel price in Arunachal Pradesh.
Also, Arunachal Pradesh the eastern-most state of India, which adds to the transportation cost from the western coast. Bihar, on the other hand, is located in central India which makes it comparatively closer to the main supply routes.
Market competition
The market dynamics highly influence the fuel prices in Arunachal Pradesh and Bihar. Arunachal Pradesh has fewer petrol pumps and fuel retailers, leading to less competition. As the market is dominated by a few players, the fuel price in Arunachal Pradesh usually remains high.
Bihar, however, has a relatively greater number of players in the market and more fuel retailers. Hence, the prices remain more competitive and less compared to Arunachal Pradesh.
Demand-supply chain
The demand-supply dynamics vary between different states. It also impacts the fuel prices to a great extent. The same holds for Arunachal Pradesh and Bihar. Considering the supply chain, Arunachal Pradesh has a limited supply of fuel due to its remote location compared to crude oil stations and inadequate storage infrastructure.
On the other hand, Bihar has enough storage facilities for fuel to meet the demand in the state. Hence, the huge demand-supply gap makes the fuel prices higher for Arunachal Pradesh than for Bihar.
Conclusion
Arunachal Pradesh is the state with one of the highest fuel prices. The fuel price in Arunachal Pradesh is higher than in many states, including Bihar. It is due to various reasons, such as geographical location, greater fuel transportation cost, limited storage infrastructure, demand-supply gap and market dynamics. Considering these factors, the fuel prices in Arunachal Pradesh are costlier than in Bihar.
Now that you know about the difference in fuel prices in Arunachal Pradesh and Bihar, you must know that fuel prices also differ greatly in other states of India. If you are curious about it, you can download the Park+ app.
Park+ will keep you updated about the fuel prices in your state. Besides, you can also learn about car brands, car trading, and insurance on this platform. You can also use this app to recharge FASTag, track traffic challan and book a parking space for your car.