THE RISING PRICE OF FUEL: EXAMINING THE FACTORS DRIVING INCREASES IN PETROL AND DIESEL PRICE IN INDIA

Abstract

Petroleum products play a crucial role in everyday life, with applications ranging from domestic cooking to transportation. Any fluctuations in their prices have far-reaching effects across various industries, leading to inflationary pressures. Therefore, it is vital to have a stable pricing policy for these products. This paper aims to examine the underlying reasons for the unwarranted price hikes in petrol and diesel by closely analyzing the downstream pricing mechanism over the past decade. The study reveals that the fluctuation rate of crude oil prices in the international market does not align with the retail selling prices of petrol and diesel in India. Furthermore, the application of Goods and Services Tax on these products could potentially lower consumer prices. The analysis suggests that the government should consider rationalizing taxation policies on these fuels to reduce public unrest. This study provides valuable insights into the challenges of fuel pricing and offers potential solutions to maximize the industry's potential. This study will be useful  to understand that the fuel pricing is one of the most important challenges if addressed properly with other complementary remedies could help maximizing the industry’s potentials.

Key words: Pricing, Goods and Services Tax, Inflation, Petrol & Diesel.