After a brief lull in Petrol and diesel prices, they will be hiked again in the coming months, according to global energy expert Narendra Taneja.
Citing oil import and the COVID-19 pandemic as the reasons for the possible increase in fuel rates, Taneja, who is the chairman of the New Delhi-based Independent Energy Policy Institute, further added that both petrol and diesel are de control commodities and thus fuel prices are not in the hands of any government.
"It is to understand that we import oil. It is an imported commodity. Today, we have to import 86 per cent of our total oil use. The prices of oils are not in the hands of any government," Taneja told ANI.
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"Both petrol and diesel are de control commodities. In July 2010, Manmohan Singh's government implemented the deregulation on petrol. In 2014, the Modi government decontrol diesel," he noted.
Taneja added that the pandemic is also the major reason for the rise of oil prices in the international market.
"Whenever there is an imbalance in demand and supply, prices are bound to increase. The second reason is the lack of investment in the oil sector as governments are promoting renewable/green energy sectors like solar power. Crude oil will be more expensive in the coming months. In 2023, the price of crude oil can rise by Rs 100," he said.
When asked about the reason why the central government slashed the excise duty on petrol and diesel, Taneja stated, "When oil prices are low, the government increases the excise duty, when oil is too expensive, the government reduces the excise duty."
"The consumption and sale of oil had come down to 40 per cent during the time of COVID. Later, it had come down to 35 per cent. When the sales have reduced, the income of the government will automatically decrease. But now that sale is back like the pre-COVID era," he noted.
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He further emphasised that the GST collection is also signalling a positive sign for the economic recovery. Taneja added that the government is "relatively in comfortable position than earlier".
He further stated that the Indian economy is based on diesel and if its price goes up then that increases the price of everything.
"The inflation is high. Considering these things, the government has taken this step," Taneja highlighted.
He believes petrol and diesel should be incorporated in GST so that more relief can be obtained and more transparency can be ensured.
Giving respite to consumers, the Finance Ministry on November 3 slashed the excise duty by Rs 5 per litre on petrol and Rs 10 a litre on diesel. Amid record-high fuel prices, this is the first such reduction in central excise duties in over three years.
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