COVID-19 has had a major impact on the economy of India. The value of rupee has fallen down in comparison to dollars. Lockdown all over the world has not just affected the economy of one country but also hiking the price of petrol and diesel severely. What are the reasons for it? Due to COVID-19, the price of petrol and diesel has hiked up to 60 paise per liter. Where on the other hand the production of crude oil has been cut down by crore barrel per day. This will very sharply affect the change in the price of petrol and diesel both simultaneously. The cut down in the production rate of petrol and diesel is about 10% of total previous production.
This cut down in the production rate is expected to give rise to the price of petrol and diesel. Study shows that the rise in the price of petrol and diesel is primarily due to the increase in the price of crude oil. Where the other reason is also the fall in the value of rupee in comparison to dollars. The instant price fluctuation in crude oil is the result of falling rupee value as compared to the dollar , which hampers the change in exchange ratio. Due to release in lockdown 1.O, there is an instant increase in demand for petrol and diesel as more cars have started running on the roads than there were in lockdown, so this increase in demand and lower production rate has hiked up the price of diesel and petrol than before.
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