Why petrol price is high in India

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Why petrol price is high in India

Petrol price in India has been on the rise in recent times, and there are a few reasons for this. First, crude oil prices have been on the rise lately, which means that the cost of petrol has also gone up. Second, the Indian rupee has weakened against the US dollar and other global currencies, which means that imports of petrol have become more expensive. Third, there has been a shortage of petrol in India due to a ban on farm sales and heavy investment in electric vehicles.

There are several things that you can do to help lower your petrol bill, including driving less and using public transportation when possible. If you live in India and are experiencing high petrol prices, it might be worth considering moving to a country where fuel is cheaper.

Why petrol price is high in India

The global oil market is in a state of flux, with prices continuing to rise. This has had a direct impact on the petrol price in India, which is now amongst the most expensive in the world. While there are a number of reasons for this, one of the main drivers is India's growing demand.

This demand is being fuelled by rapid economic growth, rising disposable income and an increasing number of car owners. In addition, India's oil refineries are not keeping pace with the country's increasing demand for fuel. This has led to a situation where Indian refineries are able to process only around 60% of the fuel that is required.

As a result, Indian petrol prices have been driven up by international demand and local refinery capacity issues. While this may seem like a temporary issue, it could become more pronounced in the future as refineries struggle to keep up with growing demand.

Supply and Demand of Petrol in India

The rising petrol prices in India is a result of both the increase in global oil prices and the weakening of the Indian Rupee against other world currencies. The higher global oil prices have caused an increase in the cost of importing crude oil, while the weakening Rupee has made Indian goods more expensive to purchase overseas.

Both factors have resulted in an increase in the cost of petrol for Indians. On average, international crude oil prices rose from $106 per barrel in January 2014 to $115 per barrel in December 2016. The Indian Rupee has lost about 20% of its value relative to other world currencies during that time period. Consequently, the cost of petrol has also increased by about 45%.

The recent hike in petrol prices has led to protests and riots in several parts of India. The government has responded by increasing subsidies on diesel and kerosene, but this will only partly alleviate the burden on consumers. In order to bring down inflation, which is currently running at over 7%, the government may need to further increase taxes on fuel products.

Impact of Demonetization on Petrol Prices in India

Petrol prices in India increased sharply after the government announced its decision to demonetize 86% of the country's currency in November 2016. This move caused widespread chaos as millions of people were left without access to cash and had to turn to alternative forms of payment, including using digital modes such as credit and debit cards.

The impact of demonetization on petrol prices is a complex story with many factors at play.

The first factor is the global market price for petrol. The Indian market is a small share of the global market, making it difficult for prices in India to significantly impact the global average.

Second is the logistics of transporting fuel. In India, oil is transported by tanker from refineries to retail stations, which makes it vulnerable to disruptions in supply chain due to factors such as accidents or political instability. In addition, India's refining capacity was already relatively low compared with other countries and has been declining since 2013 as a result of competitive pressures from other countries. This has resulted in higher demand and higher prices for petrol in India than would be the case if Indian refiners were able to produce more fuel at lower costs.

Third is tax reform in India. The current tax

Conclusion

Petrol price in India is high as compared to other countries. The reason for this could be multiple, but the primary drivers are global demand and Indian taxation. India still imports a large chunk of its oil requirements, despite massive domestic production growth over the past few years. This has driven up international oil prices, which in turn has pushed up petrol prices in India.

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