With the high fuel prices all around the country, it is not a shock for anyone that the rates can go further higher. The fuel rate depends on many factors, which is one of the primary reasons why different states pay different amounts. Although Andhra Pradesh and Kerala are not very far away from each other, there is a very prominent difference in the fuel price in both states. Have you ever wondered what is the reason behind the same?
The fuel price in Andhra Pradesh and the fuel price in Kerala are not the same, and a few factors can be held responsible for the same.
Reasons Why The Fuel Price In Andhra Pradesh Is More Than Kerala?
If you go by the recent statistical report, you will see that the fuel price in Andhra Pradesh has been higher than that in Kerala for quite some time now. There are a lot of reasons that can be attributed to this higher rate. Some of these are:
State Taxes
The government-levied state tax is the first and most important factor that will always decide the fuel price in Andhra Pradesh. There was a common misconception among people that even after the centre had decreased the prices, it failed to impact the fuel price in Andhra Pradesh.
One of the major reasons behind this was that the state government refused to bring down the prices, citing that there was inflation in the market. However, this was different in Kerala. It is one of the major reasons why the fuel price in Kerala went down by a couple of rupees.
Supply and Distribution
After the state tax, the supply and distribution chain is another important factor which often decides the fuel price in Andhra Pradesh and Kerala. If the supply is not up to the mark, it will likely impact the fuel price. This is what happened in Andhra Pradesh as well.
The supply and distribution chain could have been better formulated when compared with Kerala, which is one of the major reasons why the fuel price was higher.
The fuel market in Kerala is extremely well synchronised, so it does not require extra expenditure. Both the supply and the distribution are smooth flowing, and hence it gets the leverage of less pricing.
Transportation Cost
Both Andhra Pradesh and Kerala are indeed located quite close to each other. However, the transportation system in Kerala is much better than that in Andhra Pradesh. Hence the fuel price in Andhra Pradesh is higher than that of Kerala primarily because the logistical cost is more.
Many people need help understanding this, but for the fuel to reach you, it must go through many different steps and transportation from one place to another.
Local Market Competition
If there is a lot of competition in the market, then the fuel price is automatically desired to decrease at least slightly. If you compare the situation in Kerala, you will see that the fuel price in Kerala is lower because many options in the market provide good quality fuel. Hence, the fuel price is kept competitively low to meet the requirements and attract more clients. But this is sadly not the case with Andhra Pradesh.
Will The Fuel Price in Andhra Pradesh Always Be More than Kerala?
The question is extremely relevant. However, the answer is not fixed because it depends on many factors and the market condition. If the global situation improves and the crude oil crisis goes down, there is a high chance that the fuel price in Andhra Pradesh will also decrease.
However, if you compare the fuel price in Kerala, it will always be lesser than that of Andhra Pradesh because of the internal situation of the state. But if the government takes the initiative where they want to lower the state taxes, it will impact the fuel price.
Conclusion
If you follow the daily update, you will be able to see that Andhra Pradesh lacks good options when it comes to fuel. If you want more real-time information about the fuel situation of the country, then you can choose to visit the Park+ website. It will be able to help you with all the required information.