The oil marketing companies have continuously been surging the price of fossil fuels for the past few weeks which resulted in the prices reaching an all-time high. During a time when the country is struggling to recover from the covid crisis, the fuel price hike is sure to have a tremendous impact on its citizens and economy. The rise in the price of commodities and public transportation are expected along with a significant dip in the automobile industry. Today, the price of LPG cylinders have been increased by 25 rupees, resulting in a cumulative hike of about 200 rupees within the past three months.
India, being the third-largest importer of oil in the world has always ended up on the suffering end whenever the crude oil price has seen a surge in the international market. The recent firming of international crude oil rates in addition to the high taxes levied on fuel by central and state governments is the major reason for the extremely high fuel price in the country. Since India follows a dynamic system for altering fuel rates, oil marketing companies are mostly responsible for the recent hikes and the government has no control over it. However, the government does impose a tax on the base price of fuel. At the moment, Indians pay one of the highest taxes on fuel in the world.
By late January, the price of extra premium petrol has touched the magic digit of 100 at Rajasthan, with Madhya Pradesh and many other states following the trend in early February. The price of diesel has also set the record of reaching an all-time high in the past days. A remarkable fact is that the Indian citizens are paying about 200% of the actual fuel price as taxes, by far the highest anywhere in the world. Sources close to the oil companies have reported that the fuel prices might see a further hike as the companies will be forced to meet the global developments to avoid making losses on the sale of the fuels. The price of LPG is also on the rise with the surge being constantly climbing higher for the third in this month itself. Within the last 10 days, the price of LPG was increased by more than 50 rupees.
The government is looking forward to getting the situation under control as the surge in the price of auto fuels can directly reflect in its economy and might even result in inflation. Though short term remedies like cutting down taxes and other related costs are in line, the major emphasis is on turning towards sustainable and renewable energy resources and reducing the dependency on fossil fuels in the long run. Plans have already been laid on increasing the natural gas share in the energy basket and to cut short the reliance on fossil fuels to about 60% of the total energy share by 2030.