India is the fourth largest consumer of energy in the world. There has been a registered growth of 5% of the same in the year 2011-12 and to meet the increasing demand, the government has to import more and more petrol. If spending of the country as a whole is considered then 80-90% is done to pay the import bills on petroleum products, which is accounted as country‚Äôs expenditure. And hence the prices of petrol have always been on the rise across the country.
But the rise in petrol price has a rippling effect. As all the commodities are transported across India on vehicles that run on petrol or diesel, so an increase in petrol price results in a price rise of these commodities as well. The greatest sufferer of all this is a common man. Today, every Indian spends almost half of his income on food items. If the petrol price in India keeps on increasing then every food item will get costlier. It will result in less savings and more of expenditure. Eventually, more and more people will be pushed towards the poverty line.
But the main question that always crosses the mind is that why India needs to import oil? The reason is that India does not have enough of oil to meet the growing demand for oil. Near about 1.4 million barrels of diesel are used per day in India especially by farmers, trucks and industry. So to meet the growing demand, most of the oil is imported from other countries resulting in more expenditure.
Not only this but the condition of Indian currency is also not favourable in the current scenario. India is going through a currency crisis where the value of Indian Rupee is falling in comparison to the US Dollar. That is why Oil Marketing Companies (OMCs) like Indian Oil Corporation (IOCL), Bharat Petroleum (BPCL) are paying more for the same quantity of crude oil. Due to this, OMCs have lost near about 4,300 crores in the past six months for selling petrol at low cost.
While petrol costs ‚Çπ89.01 a litre in Mumbai, diesel is priced at ‚Çπ78.07, according to the daily price notification issued by State-owned oil marketing companies (OMCs). In Delhi, petrol is sold for ‚Çπ81.63 and diesel at ‚Çπ73.54, which is also a record high but lowest among the four metro cities.In Kolkata, the petrol price is ‚Çπ83.49 and diesel dispensed for ‚Çπ75.39.In the case of Chennai, petrol is sold for ‚Çπ84. 85 and diesel at ‚Çπ77.74.
The petrol prices have gone up about 6% since August 1, while diesel prices were up by 8% in the same period.
India imported crude oil worth ‚Çπ 2,640,30 crore (over $39 billion) between April and July 2018, according to data provided by the Petroleum Planning and Analysis Cell.
To overcome this issue, the Government must take a strong decision as increasing prices will solve one problem but would further lead to many other issues such as poverty, inflating, the high cost of living, frustration etc.