Petrol, diesel prices burning a hole in the pocket, here’s why fuel prices are increasing so much

After seeing rate hike for 12 consecutive days since February 9, oil companies have kept the prices of oil steady for second consecutive day on Monday. Petrol in Delhi has already crossed Rs 90 per litre while in Mumbai it is being sold at Rs 97 per liter, the most expensive in four metro cities.

Amid surging fuel prices in the country, Union Petroleum and Natural Gas and Steel Minister Dharmendra Pradhan on Sunday termed “less fuel production by manufacturing countries to gain more profit” as one of the reasons behind the price hike.

“There are two main reasons behind the fuel price rise. The international market has reduced fuel production and manufacturing countries are producing less fuel to gain more profit. This is making the consumer countries suffer,” Pradhan told ANI during his visit to inspect the venue where Prime Minister Narendra Modi is scheduled to address a rally in Assam`s Dhemaji on Monday.

He further stated, “We have continuously been urging the Organisation of the Petroleum Exporting Countries (OPEC) and OPEC plus countries that it should not happen. We hope there will be a change.”The prices of petrol and diesel are increasing continuously for more than 10 days and in some states, the price of petrol has even crossed Rs 100 in some states.Justifying the taxes levied on petrol and diesel, he said that the Centre and the states are doing various development work in the wake of the COVID-19 pandemic, for which they collect taxes, adding that these development projects generate jobs.

“Another reason is COVID. We have to do various development work. For this, Centre and state governments collect the tax. Spending on development work will generate more jobs. Govt has increased its investment and 34 per cent more capital spending will be done in this budget. State governments will also increase spending. This is why we need this tax but there is also the need for balance. I believe the Finance Minister and state governments can find a way,” stated the minister.