We all know that the price of petrol is rising day by day and we are blaming our govt. You might not know the fact that petrol is made from petroleum and exported to India from Dubai.
The initial reason for the price of petrol is that the demand for petrol is increasing but the supply is the same. So to equalise demand and supply govt forcefully has to increase the price of petrol.
But what if the price of petrol reduces.
The impact of this is-
- Demand increases.
- Pollution increases.
- Petrol will disappear from the earth
A direct impact of rising diesel and petrol prices is an increase in what you spend on fuel every month for the same amount of travel. Back-of-the-envelope calculations show that a person driving 900 km a month in Mumbai could see her monthly fuel bills in May 2018 go up by about Rs1,250 for a petrol car and Rs1,000 for a diesel car, compared to May 2016. Delhi commuters take a hit.
Unfortunately, this is a cost you can’t do much about. “If a person is accustomed to travelling to the office by car, just because her monthly bill has gone up by Rs2,000, this person will not switch to public transport. The only thing that can be reduced is weekend driving to some extent," said Suresh Sadagopan, certified financial planner and founder of Ladder 7 Financial Advisory.
Madan Sabnavis, chief economist at CARE Ratings, said high fuel prices over a prolonged period may force households to reallocate resources. “If I have to increase a certain amount on fuel, then either I will be saving less or I will have to cut down on other expenses. So if the higher prices remain for a long time, it could affect demand for other products or reduce savings," he said.
