Less Supply More Demand

The global recovery gains strength, lower the global price of crude petroleum is approaching its highest level since 2018. The explosion in prices has been leading to record high prices of petrol and diesel in India as well. The Petroleum Ministry has frequently stated that it oil-exporting key countries to increase the supply of crude or petroleum and lower the official selling price for Asia. As we already know that most Asian countries are developing. More demand and less supply can affect the whole development scenario. The usage of Crude and petroleum is crucial in various industries. Today in this article, we are analyzing the causes of high crude and petrol oil prices. In addition, we’ll also look into how India is striving to tackle this scenario in the best possible way.

GLOBAL RISE IN PRICE OF PETROLEUM

OPEC + Group – KEY Countries

In its latest round of meetings regarding crude oil, the OPEC+ group of oil-producing countries reaffirmed. That they would increase the total crude oil supply by only 400,000 barrels per day in November despite a sharp increase in prices. In other words, they said that they can supply this quantity of oil to us.

You will also ponder what is this OPEC + group. The full form of OEPC + group is an organization of the Petroleum Exporting Countries. In addition, these countries have abundant sources of Petroleum. Which they transport to the other countries. India is also an importer of Petroleum from the OPEC + group. Because here there is a shortage of petroleum in our country. So, we have to import it. It is also an interesting thing that oil is cheaper than water in oil-exporting countries. For example, Saudi Arabia, Russia, Iraq, UAE, and Kuwait have abundant oil wells.

However, the output of the top oil-producing countries would still be about 14 percent lower. And it’ll be lower than reference levels of production post the increase in November.

OPEC+ had agreed to sharp cuts in supply in 2020. As a result of Covid-19 global travel, restrictions occurred in 2020. That is why the cartel has been slow to boost production as demand has recovered. Simply, the supply wasn’t enough to cater to the production. India and other oil-importing nations have called on OPEC+ to boost oil supply faster. They put a word that raised crude oil prices could weaken the recovery of the global economy. And especially in developing countries. Because we can not afford the heightened prices. Then As a nation, we have to cut off our demand by ignoring the possible production. As a result, it can impact us and then the global economy as well.

Impact of increased taxes of fuels on price (of petrol or diesel )

Increased tax levels are also playing a major role in the current record-high prices in India. And high prices are the topic of discussion in our country right now. That is why it is very important to understand the back story as well.
The pandemic also become a whole lot of reasons for that.
The central government had last year increased levies on petrol by Rs 13 per liter and diesel by Rs 16 per liter. It was done to shoot up the revenues of the government. Because the pandemic forced a sharp slowdown in economic activity. As we all know that Lockdown harmed the economy more than anything. Central and state taxes currently account for about 53.5 percent of the pump price of petrol and about 47.6 percent of the pump price of diesel in Delhi.

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