Petrol Price In Jammu
Since 75% of the crude oil consumption in India is dependent on import, it is very normal for the fuel rates to see some fluctuations. No wonder, the petrol price in Jammu has experienced highs and lows over the last few years. However, crude oil isn’t the only factor involved in the pricing. Even though it is one of the key components, there are a few other aspects taken into account before determining the petrol rate in any region in India.
This article focuses mainly on the various factors that affect the petrol rates in Jammu and the various ways through which the prices are decided in India. But before that here is a quick introduction about Jammu and its economy.
Jammu is the biggest city in the division of Jammu and of course, the winter capital of J&K (Jammu & Kashmir). This city features various small industries and manufactures as well as exports electronic goods, carpets, Kashmiri shawls, electrical, etc.
|Also Know: Diesel Price In Jammu|
Jammu contributes about 0.76% to India’s overall GDP and ranks as the twentieth state in terms of contribution. The three primary components of Jammu’s GSDP (Gross State Domestic Product) are:
- Manufacturing and Industry
- Agriculture and allied sector
|Also Check: Petrol Price in Srinagar|
Factors That Affect The Petrol Price In Jammu
Though there are multiple factors that affect the fuel rates in India, the important ones are mentioned below:
1. Cost Of The Crude Oil
Whenever there is an incline in the petrol prices, an important factor that is involved here is “crude oil.“ The cost of the crude oil in the current international market plays a key role in the domestic market as well.
Increased demand for crude oil, political interventions, and low production levels in any of the oil-producing countries have a major impact on the nations they supply to.
2. Increase In Demand
When there is an increase in demand for a commodity, its price is certain to increase too. This is a general rule and therefore, fuel is no exception. As far as some developing nations like China and India are considered, the demand is turning higher and higher, which becomes another important factor for the petrol prices to go up.
The rates of not only petrol but also other petroleum products vary based on the tax norms set by the local governments. Whenever the Indian Government increases the taxes on fuels, the OMCs (Oil Marketing Companies) have no choice than to increase their rates. They do this to recover from their losses while keeping their profit margins.
4. Imbalance In the Demand-Supply Cycle
This is another factor that affects the overall fuel prices in any region in India. Whenever the Oil Companies have the problem of meeting the needs of petrol, there will certainly be a shortage in the overall production and supply from the refineries too. This, in turn, raises the crude oil’s cost, which again, backfires on the fuel rates.
5. Increasing Population
It is well known that countries like India and China top in the list of over-population. A major issue with this also falls on the supply-demand chain of a gasoline product.
With an increased population, the demand for any commodity will be higher, and so are its prices.
What Pricing System Does Jammu Follow?
As of now, every region in India, even including Jammu, follows the mechanism of “dynamic fuel pricing.“ This was implemented on June 16, 2017 considering the drawbacks of the existing pricing system.
Before this methodology came into effect, India followed the “fortnight pricing mechanism.“ According to this system, the prices were updated on the first and sixteenth day of every month at 8:00 a.m. IST (Indian Standard Time) based on the previous days’ market performances, international crude oil rates, and CER (Currency Exchange Rates).
However, this had a lot of issues. There was no transparency in the system, the governments could easily affect or influence the Oil Marketing Companies, and sometimes, they incurred heavy losses.
Therefore, to overcome all of these, the concept that most developed countries followed, was implemented, which was none other than the – dynamic pricing. According to this system, the prices are updated every morning at 6:00 a.m. based on the latest market trends.
Does GST Have An Influence On The Petrol Rates In Jammu?
Since GST has not yet been brought for a commodity like fuel, petrol rates have no influence under it. Even if the Government of India decided to bring GST for petrol and diesel, they have to think over various things and moreover, this is a huge step, which will require a good amount of time.
Also Check Petrol Price in NearBy Cities of Jammu
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