We witness fuel prices fluctuate everyday across the country. Every country has different prices. The Fuel prices hike has a huge impact on an average human's life. As every person has their own budget to maintain and diesel petrol price hike tends to disbalance it. If you own a vehicle, you would know how much petrol and diesel prices have fluctuated today.
Even in the national capital the prices of taxis and cabs have increased due to the hike in petrol and diesel prices. Traveling from one place to another costs a lot in one's pocket.
Petrol prices have hiked to record highs, exceeding Rs 100 per litre in major areas, following the recent budget announcements. In the month of February 2021, the rise topped all predictions and continued for ten days. All retail prices across the country were pushed up as a result of this. The fuel price hike in cities like Mumbai, New Delhi, and Bangalore, have reached Rs 100 per litre. It's important to note that India's petrol and diesel prices are the highest in the world when compared to its neighbors.
Since India is the world's third largest consumer of crude oil, the government has imposed high taxation on fuels. India has no oil reserves and imports 80 percent of its consumption from other countries. As a result, the government imposes taxes to reduce the demand for these products, taking a toll on foreign exchange reserves. The government wants to emphasize its alternative uses, including as electric automobiles. The government is under pressure to take severe measures since exchange reserves and the "trade deficit" are increasing, weakening the Indian rupee.
Petrol and diesel prices have hiked by tenfold in the last three days. It is no surprise that this has consequences in every sector of the economy, both directly and indirectly. The impact is significant, as inflation absorbs a significant portion of their income. These price hikes are digging a hole in people's pockets, starting with transportation costs, goods prices, and groceries, and the chain is continuing to spread.
However, there is another consideration that cannot be ignored and, at the same time, supports the fuel price hikes. Locally, prices jumped in June 2020, following an 82-day price freeze. India's crude oil demand increased month after month, despite the fact that it already accounted for 80% of imports. On the other hand, a boost in global pricing has a direct impact on fuel prices in India. Following the shutdown, fuel demand increased to an 11-month high in December 2020. Only imports increased by 29% in December compared to November. This was also an 11.6 percent increase over the previous year.
The highest price of fuel was recorded in the month of May in 2022, which was Rs 123.47 in Parbhani in Maharashtra.
This is due to the fact that certain state governments are imposing several new taxes and levies on fuel.