Oil marketing companies are planning to put in place a mechanism under which fuel prices (petrol and diesel) will be aligned to international crude oil prices on a daily basis.
The effect: You will have to check petrol and diesel prices daily before refuelling your vehicle.
In fact, according to a Reuters report, state-owned fuel retailers plan to implement daily revision of fuel price in five cities from May 1 ahead of a nationwide rollout of the scheme, industry sources said.
To begin with, daily revision of fuel prices will be implemented in Puducherry and Vizag, Udaipur, Jamshedpur and Chandigarh, they said.
Currently, oil marketing companies decide on change in fuel prices on a fortnightly basis.
Let's examine the impact of the proposed change in fuel prices on a daily basis.
ALSO READ: Why petrol, diesel prices may change everyday
The government deregulated petrol price in 2010 and diesel price in 2014. It, henceforth, allowed oil marketing companies to decide on the prices of fuel, considering the change in international oil prices and currency exchange rate.
Since oil marketing firms Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp are state owned, they are often not allowed to raise prices in the election season since it would prove detrimental to the prospects. To compensate oil companies for that, the government allows them to charge higher prices even when international oil rates have fallen.
Assembly elections in five states-Uttar Pradesh, Punjab, Goa, Manipur and Uttarakhand- were held during January to March 2017.
Oil marketing firms raised petrol and diesel prices by Rs 1.29 per litre and 97 paise on January 2, 2017. They cut price of petrol by Rs 3.77 per litre and that of diesel by Rs 2.91 a litre on April 1, 2017, the first change in rates in two-and-a-half months even though currency exchange rates and international crude oil prices fluctuated by wide margins during the period.
But the decision to change fuel prices everyday will less likely invite interference from political parties to address their interests. Even if they would interfere with the price change, they will not be able to defer the decision for long due to the urgency to revise prices daily.
No shock to customers
The revision in oil prices will not affect consumers much as international oil prices do not fluctuate widely on a daily basis. So, change in prices of petrol and diesel will not badly affect the commuters in the long run. They may be in for a surprise if some major international event affects the price of crude oil and its effects are felt on diesel and petrol prices in India.
Effect on inflation
The new practice will add one more factor to the change in price of essential commodities such as food items, cereals, fruits and vegetables. The prices of essentials may fluctuate on a daily basis, if the mechanism of daily change in fuel prices comes into effect.
Books of accounts
The price movement will immediately reflect on the book of accounts of oil marketing firms, allowing them to reduce or make provision for losses or profit arising out of sale and purchase of fuel on daily basis. Maintaining sales and cash receipts journals will become a lengthier process after due to daily change in prices of fuels.
IELTS Writing Task 2 Sample 456 - Increasing the price of petrol is the best way to solve growing traffic and pollution problems
- Last Updated: Monday, 29 May 2017 15:28
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IELTS Writing Task 2/ IELTS Essay:
You should spend about 40 minutes on this task.
Increasing the price of petrol is the best way to solve growing traffic and pollution problems.
To what extent do you agree or disagree with the above statement?
What other measures do you think might be effective?
Give reasons for your answer and include any relevant examples from your own knowledge or experience.
You should write at least 250 words.
Sample Answer 1: (Agreement)
Over the last century, our cities faced unprecedented growth of traffic congestion and as result of this, we encounter a litany of environmental pollutions. Some experts believe that a rising cost of petrol is the best way to tackle these problems. I firmly believe that there is a defensible basis for this argument. In this essay, some other possible solutions will be elaborated.
The proponents of this view claim that recent studies have shown that due to increasing the price of petrol, the using of this energy has dramatically decreased. As result of this, the wide demand of petrol has slumped. The key point to justify this attitude could be illustrated by a tangible example. Our country “Iran” has a high reputation for having oil resources. Consequently, the price of the petrol was not justified by comparison with another country. To cut a long story short, after applying this idea in cities, the evidence has shown most of the people turn to some Alternatives instead of the use private car. For example, by the time went on, the rising price of petrol has caused majority the people use much more public transportation rather than the past.
Alternatively, there are other possible solutions to address this issue. First and foremost, the governments should give special care to renewable energy such as the water, wind, solar energy and etc. Also, they should encourage people to use public transportation such as electric tram, metro, bus and etc. Last but not least, we should own up to the fact that we need cultural reconstruction about the true understanding of energy crisis on our planet.
In conclusion, from what has been discussed above, increasing the price of petrol can be an effective factor to reduce consumption of this energy, at least in my country. Serious measures should be taken by government and individuals as a duty for solving these problems. Also, the government must assume responsibility, stop passing the bulk and settle down the effective laws for control this issue. Finally, it is absolutely imperative we should not try to be wise after the events.
[ by - Reza Paziresh ]
Sample Answer 2: (Disagreement)
It is considered that increasing the price of petrol is one of the most important ways to curb escalating traffic and pollution problems. However, in my opinion, I completely believe that using other sustainable sources of energy like solar, wind and hydro will immensely help to tackle such issues.
On the one hand, there are people who think that increasing the price of petrol will reduce its use and, thus, decrease rising traffic congestions and pollutions. However, in spite of increased petrol price people will continue to use it as there are no other viable options available to run vehicles. Hence, it will not bring much change in solving growing traffic issues and pollutions. In fact, due to increase in petrol price cost of goods may increase because of increase in the transportation costs, creating detrimental effects in the economy.
On the other hand, if more sustainable energy like solar power, wind power, and hydropower are utilised to run vehicles and factories, there will be less emission of harmful gases like carbon mono oxide and CFC which contributes increasing air pollution considerably. In addition, using solar power to run public vehicles would result in cheap fare. This will encourage people to travel through eco-friendly cheap trams, trains and buses.
To conclude, increasing the price of petrol is not the best way to resolve growing traffic congestions and pollutions. Thus, effective way to control aforementioned issues would be to use other renewable sources of energy in public transport system which can significantly bring down traffic and pollution problems.
[ by - Vikash Singtan ]
Sample Answer 3: (Agreement)
Traffic and pollution have been being two major concerns worldwide lately. Several solutions have been proposed to deal with these problems, improving the price of petrol for example. However, whether or not it is effective is debatable. Yet, I personally agree with proposing a more expensive price of petrol to reduce traffic and pollution based on demanding point of view.
To begin with, a classic economic theory clearly argues that the higher the price, the lower the demanding of a product and reversely. By increasing the price of petrol, more people may be more aware of using vehicle considerably since they need to pay more to fill the tank. This idea can lead to a systematic approach to reducing traffic and air problem through declining possibilities of people to buy fuel needed to run their vehicle and this may result in reducing the number of transportation tool subsequently. For instance, Whitehorse city has imposed the expensive price of fuel and gas which influences the number of vehicles operating and as a result, it comes up as the cleanest air city of the world.
Meanwhile, the other way to overcome traffic and pollution is by optimising the public transportation. A good system of public vehicles accomplished by better infrastructure may be delightful to everyone and can attract individuals to use public transportation more often than their own vehicles. This idea certainly can minimise the amount of traffic and pollution as well. Mass rapid train in China and Japan, for example, sophisticated transport and well-managed train schedule have successfully brought up these countries in lessening traffic problem.
All in all, a wide range of solutions is available to help cope with traffic and pollution problem. Improving fuel price and public transportations are true as proposed solutions.
[ by - Linda ]