Fuel Prices Could Spike Again In Coming Months, Energy Expert Says

Energy expert Narendra Taneja said that oil is an imported commodity, therefore the prices cannot be controlled by the government. Covid-19 pandemic too had been a reason for increased oil prices.

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New Delhi: Energy expert Narendra Taneja has said that petrol and diesel prices will rise again in the coming months. 

After fuel prices reached record high in the country in the past few days, the Union Ministry of Finance announced a cut of Rs 5 on petrol and Rs 10 on diesel on Wednesday. 

In an interview with ANI, Taneja said oil is an imported commodity, and since around 86 per cent of the total oil used is imported, the prices of oil cannot be controlled by the government. 

Citing reasons for increase in the prices of petrol and diesel, Tanjea said the Covid-19 pandemic was one of the major reasons oil prices are increasing in the international market. 

Since the demand for fuel came down during the pandemic, the oil prices rose. During the time of Covid, consumption and sale of oil had reduced by 40 per cent, which further came down to 35 per cent. Therefore, with reduction in sales, government revenue too came down. Taneja, however, said the sale figures have now reached back to what they were before the pandemic. 

Another reason that the energy expert cited for increase in oil prices internationally was promotion of green energy sources. Lack of investment in the oil industry and promotion of renewable energy sources like solar energy by governments in many countries is another reason why crude oil prices are increasing. 

The expert said crude oil prices can go up by Rs 100 by 2023. 

He also said that the current GST collection by the government suggests a positive trend for the economic recovery. “The government is in a relatively more comfortable position than earlier. Plus, our economy is based on diesel. If the price of diesel goes up that increases the price of everything. The inflation is high. Considering these things, the government has taken this step," he said.

According to Taneja, petrol and diesel should come under GST to bring in more transparency and relief.