Petrol-Diesel prices could skyrocket after elections in 5 states are over

The common people of India may soon get a big setback, which will spoil the budget from their journey to the kitchen. Due to the ongoing war between Russia-Ukraine, only a few days are left to see the big effect of the wild increase in the price of crude oil. Recent, released reports have raised the possibility that after the ongoing assembly elections in five states or after the election results are out, there may be a big increase in the price of petrol and diesel. Due to this, while traveling will become expensive on the one hand, on the other hand the cost of freight will also increase, which will have a direct impact on everyday things.

Loss making oil companies

Significantly, the price of crude oil in the international market reached a decade high of $ 117 per barrel, although there was some softening on Friday, but despite this, it remains at a high level. Despite the increase in crude oil prices, the prices of petrol and diesel in the country have remained the same for the last four months. In such a situation, the oil companies are facing heavy losses. In the report of ICICI Securities, on the increasing losses of domestic oil companies, it has been said that due to the sharp rise in global crude oil prices in the last two months, the government-owned retailers have been facing heavy losses and now the companies have to deal with it. They are preparing to put the burden on the people of the country to reduce it.

Petrol can be costlier by Rs 15

Many reports are coming out about the increase in the prices of petrol and diesel in the country. According to these reports, within the coming ten days, the price of petrol and diesel in the country can be increased by Rs 15 to Rs 22. In fact, the report said that domestic oil companies will have to increase the prices of petrol and diesel by Rs 12.1 per liter on or before March 16, 2022, just to compensate for the cost. Adding the margin (profit) too, they will have to increase the price by Rs 15.1 per litre. Obviously, if the oil companies make these increases, then it will be a big blow for the common people of the country.

Price stable due to elections

Assembly elections are being held in five states of the country and the last phase of voting is to be held on March 7. The result of these elections will come on March 10. It is expected that as soon as the results come out, a big setback of inflation is going to greet the people of the country in the form of increase in the prices of petrol and diesel. Significantly, due to the Russia-Ukraine war, the price of crude oil continues to rise in the global market. Despite this, there has been no change in the price of petrol and diesel in the Indian market for four months due to the assembly elections in five states.

Strong jump in crude oil in 2022

With the beginning of the year 2022, there was a sharp jump in the prices of crude oil. In the last week itself, breaking its year on year record, the price of Brent crude crossed $ 100 per barrel for the first time since 2014. Apart from this, if we talk about the last four months, then during this period the price of Brent crude has increased continuously. If we look at the data, the price of Brent crude has increased by 10.22 percent in December, 17 percent in January, 10.7 percent in February and more than 16 percent in March so far. According to Morgan Stanley, it may increase further due to the Russia-Ukraine war. If the supply of oil from Russia continues to be disrupted, then crude oil in the global market can reach $ 185.

85% crude oil imports

Significantly, India is a major importer of crude oil and it buys more than 85 percent of its crude oil from outside. India has to pay the cost of imported crude oil in US dollars. In such a situation, due to the increase in the price of crude oil and the strengthening of the dollar, the prices of petrol and diesel are affected at the domestic level, that is, the fuel starts becoming expensive. If the price of crude oil increases in the international market, then obviously India’s import bill will increase. A report has expressed hope that India’s import bill may cross $ 600 billion.

The risk of rising inflation will increase

It is worth noting that retail inflation in the country has already remained at a high level. In such a situation, the rise in the prices of crude oil will prove to increase it further. Union Finance Minister Nirmala Sitharaman has also recently said that rising crude oil prices are going to be a big challenge. If crude oil becomes expensive, then it is going to fall on petrol-diesel and gas in the country. With the increase in the prices of petrol and diesel, the expenditure on freight will increase and inflation on everyday items including vegetables and fruits will increase, which will have a direct impact on your pocket.

This is how prices are determined

Oil distribution companies determine the price of petrol and diesel daily keeping in mind the price of crude oil in the international market, exchange rate, tax, transportation cost of petrol and diesel and many other things. Till 2014, the task of fixing the prices was on the shoulders of the government and their prices changed every 15 days. But after June 2014, this work was handed over to the oil companies. Talking about the price of petrol and diesel, they were last changed before Diwali, since then their prices have remained stable. However, still the price of petrol remains Rs 100 per liter in many states of the country.