what is the reason for frequent fuel price hikes even the international crude oil rate is nominal?
sony..
what is the reason for frequent fuel price hikes even the international crude oil rate is nominal?
sony..
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Dear before telling you any reason about the hikes in price of fuel that India is a mixed economy means not like China - Completely Close and not like America - Completely open economy in the world that means other countries of the world can easily invest in India and India is also allowed to invest for some specific areas in other countries that is why Indian economy is flexible and can turn easily but not very loose because there are some strict rules in our country that controls the economy as - FDIs etc.
Fuel is very important and major part of the economy of India where it covers a huge part in Indian Economy and you have asked the reason that why fuel prices are increasing after a fix duration of time and sometimes decreasing too so these type of changes are normal in a mixed economy and there are some certain reasons of hikes in fuel prices
As you have mentioned that crude oil is nominal in international market so I would like to inform you that technology of making fuel from crude oil means fuel refineries buy crude oil from international market on international prices and international price means to trade in the currency of USA that is - USD - United States Dollar and also called American Dollar which is considered and accepted by the entire world because America is the developed country in the world and internationally most powerful that is why dollar has separate reputation in international market and all countries trades in USD
Now you may think that what would be the cost of fuel production for India because Indian Rupees are has very less reputation and cost compare to American dollar where our 60 rupees are equal to 1 American Dollar so suppose we buy the fuel of about 1 lakh USD so this will be around 6000000 INR for us that can not be afforded easily by India because this is being highly costly for us that is why somewhere this is also the reason because Indian Rupee is loosing value and cost at international level
Second reason can be that we do not have very good refineries like other countries i.e. - Russia, Qatar, Iran etc. that is why these countries sale fuel on higher prices because they invest in refinery and charge into the actual price of petrol so we buy the petrol on higher prices from international market
Another reason may be that transport tax that are different in all states of India and other international countries so whenever we trade for fuel so we have to pay the tax charges to the country that becomes very expensive for India so central government of India also pay the charges - Excise and customs duty
Various state government of India also charges according to the condition and mainly for transport tax so petrol become costly state after state and all taxes and duties are included in the actual price of the petrol so people also pay the tax with the actual price of petrol
Private companies in India - Indian Oil Corporation, BPCL - Bharat Petroleum Corporation Limited, Reliance Petroleum, HP - Hindustan Petroleum etc. also takes the profit because these companies produce the petrol on international prices and when government buy the fuel so they takes all the profit from the government and government of India takes taxes and entire amount from the public
Whenever companies gets under deficit so they point the government that prices of petrol should be increased at the time so government increase the prices because companies can never get under deficit and if they come under so then companies will stop production and petrol availability may be effected in entire India
Indian Economists are trying more than their efficiency to control the economy and value of rupee in international market but there are some reason that does not allow to get control over the economy because there are so many parts and all can not be managed easily by experts and Economists
Import and Export also effects the prices of fuel and all other things where if export is being more than import from other countries then value of rupee will be increased but India imports things more than export from other countries so value of rupee will be decreased so this type of activities also effects
All the best
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