People’s budget has been shaken due to rising prices of petrol and diesel in the country. Petrol prices have crossed Rs 100 in many states. However, petrol and diesel prices have remained stable in the country for the last two weeks. They have neither increased nor fallen in price, but internationally, crude oil prices have seen an increase for the past two weeks. In such a situation, the question arises whether there is no change in the prices of petrol and diesel due to elections in five states?
As the international crude oil prices were increasing in the month of February, therefore the fuel prices were rising in the country. Oil companies said that due to the increase in international crude oil prices, prices of petrol and diesel are increasing in the country. Due to this, the prices of petrol and diesel had come to their highest level in the country. In many places petrol prices had crossed 100 rupees. However, there has been no change in the price of petrol and diesel since February 27, whereas between 27 February and 13 February, there has been an increase in the price of crude oil internationally.
At the same time, some people say that the prices of petrol and diesel have remained stable in view of elections in five states in the country. Election dates were announced on 26 February in West Bengal, Tamil Nadu, Assam, Kerala and Puducherry. After this, there was a change in the price of fuel on 27 February and till now the prices of petrol and diesel have not increased or decreased since the 27th. Although the government has said many times before that it is not in their hands to fix the prices of petrol and diesel in the country. In such a situation, since February 27, international crude oil has increased by $ 6-7 per barrel, but since the announcement of election dates in the country, it did not have any effect and the prices of petrol and diesel have become stable.
What is the mathematics of change in prices?
In such a situation, it becomes very important to understand the arithmetic of the changes in the prices of petrol and diesel. Utkarsh Sinha, managing director of Bexley Advisors, says that it is important to note that there is no direct correlation between the price of crude oil and the amount to be paid at petrol pumps. Crude prices contribute about one third of the price per liter at the pump, the remainder is divided between the cost of crude oil refining and the excise duty of the government.
He said that India takes a paternalistic approach to pricing fuel at the pump, meaning that in bad times it helps offset costs through subsidies. At the same time, when crude oil is cheap, it prepares for a shortfall. This is a system which has helped Indians in avoiding the sharp changes in prices. He said that if there is a 10 percent change in the prices of fuel, then in India its issue reaches the Parliament. This is largely due to the deliberate approach adopted by the government to maintain long-term stability in prices.