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When Will Fuel Prices Go High and How Much?

Increase in fuel prices has created disturbance among the vehicle owners. The rumors say that the price will be hiked Rs. 10 per liter and has given a shock to every one. Now the latest news is that the prices are likely to go high this week. Though the policy managers are debating a reduction in customs duty on both crude and petroleum products, still the government has decided to increase the price of the petrol and diesel.

The price of petrol is expected to increase by a maximum of Rs 5 per litre and diesel by Rs 2. The suggestion is to cut in customs duty on crude oil from 5% to 2.5% and a reduction in import duty on petrol and Diesel by 2.5% from the current 7.5%, as this will bring down the retail prices and also cut in import duty on petrol products will help oil refiners a relief of nearly Re 1 per litre.

Even with political pressure, the finance ministry was not ready to reduce the excise duty. Due to increase in the crude prices, the excise duty on petrol has been made specific at Rs 14.35 litre (from 6% + Rs 13/litre earlier) and diesel at Rs 4.60 per litre (from 6% + Rs 3.25/litre).

If the fuel prices grow in such speed, the demand for cars will fall. The car- manufacturers have also increased the prices and all this is going to affect the car sales. Recently the sales were boosting up with many news launches and variants but with the increase in both car prices and fuel prices, there the demand for cars will be low.

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