Why petrol, diesel prices are rising? Petroleum minister explains

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

"There are two main reasons behind high fuel prices. The international market has reduced fuel production and manufacturing countries are producing less fuel for more profit. This makes consuming countries suffer," Pradhan told 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 said: "We constantly urge the Organization of the Petroleum Exporting Countries (OPEC) and the OPEC Plus countries that it should not happen. We hope there will be a change."

Petrol and diesel prices 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 center and the states are doing out 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. That is why the central and state governments collect the tax. Spending on development work will create more jobs. The government has increased its investment and 34% 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.

Amid an outcry over record high petrol and diesel prices, Union Finance Minister Nirmala Sitraman said on Saturday that the central and state governments will jointly have to work out a mechanism to bring retail rates to reasonable levels.

Source: BusinessWorld

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