Let Not Fuel Price Be Increased in India

It is alarming that brent crude oil price touched $ 140 per barrel. Some credible study groups are of the view that if Russia Ukraine war were to continue any longer , then brent crude oil price may increase even further.

by N.S.

Venkataraman The Oil Marketing Companies ( OMCs) have now raised the price of diesel for bulk users by Rs.25 per litre, resulting in industrial users having to pay Rs.

115 per litre in Delhi and Rs.122.05 per litre in Mumbai and higher price in several other states all over India.

Further, LPG for domestic price has been raised by Rs. 50/- for cylinder and some increase has been announced for the price of petrol too.

While everyone understands that India is now facing crude oil supply crisis in price term due to Russia's invasion of Ukraine, people wonder whether in the face of this crisis, rising the price of fuel is the only option left for India. People also doubt whether the Government of India has carefully examined the other options, instead of exercising the familiar and easy option of increasing the price, unmindful of the consequences.

The raise will indirectly impact end consumers severely.Excessive import dependence on crude oil :It is alarming that brent crude oil price touched $ 140 per barrel.

Some credible study groups are of the view that if Russia Ukraine war were to continue any longer , then brent crude oil price may increase even further.India imports more than 230 million tonne of crude oil per annum, with the outflow of foreign exchange due to crude oil import at present ( before this recent crude oil price hike) more than 27% of foreign exchange earnings.

The present production of crude oil in India is only around 32 million tonne per annum and it is unlikely to increase significantly in the immediate future. Further, the demand for crude oil in India and consequent import has been increasing at 5 to 6% per annum and this trend is likely to continue.

With the rupee now breaching 77 per US dollar for the first time and global brent crude oil price increasing at alarming level, the implications for Indian economy and industrial activities could be very severe.Fuel price increase not desired option :To tackle such extremely difficult situation, Government of India should not repeat it's strategy of increasing the price of fuel for industrial and domestic consumers.

The price of fuel is already very high considering the purchasing power in the country. Further increase in price of fuel would lead to unbearable cost...