 You're watching News Made Easy. I am on Indio Chakravarthy. Petrol prices are creeping up little by little every day after they had been held in place for more than four months. It was expected, some expected this price to shoot up after the UP elections were over. But why are they rising at all? And do they need to rise at all? That's what we are going to look at today. But first, let's understand where petrol and diesel come from. Fuel comes from crude oil, which feeds one third of humanity's energy requirements. This precious, dark, viscous liquid, like gold, is found under the Earth's surface. Not just in Saudi Arabia and the Gulf, but also in Russia. Russia is not just the world's third largest producer of crude oil and its second largest exporter. But it's also the largest producer of natural gas, another key energy source for the world today. Russian natural gas accounts for nearly 40% of the gas imported into Europe. And oil and gas exports to Europe and the US are key drivers of the Russian economy. But Vladimir Putin has disrupted this entire energy trade in one strike. As Russian tanks reduced Ukraine to a rubble, the economic blockade by Europe and the US has set fire to fuel prices across the world. Crude oil prices were rising even before Russia invaded Ukraine. In April 2021, for instance, crude oil, the Indian basket that Indian companies buy was about $67 per barrel. By November, it had shot up to $89 per barrel. That went to $97 per barrel in January. Then in February, it was $109 per barrel on an average. It has come down. In fact, in March, in the middle of March, it went down to $103.50. But despite that, because petrol prices were held, now they're going to catch up. The last time your local petrol pump had increased prices was in November 4th, 2021. Since then, for 137 days, the prices were held till they started rising last week again. At that time, a barrel of crude cost Indian companies about 6,600 rupees. Since then, not only has crude become more expensive, but the rupee has also weakened. So the rupee cost of a basket of crude is now about 7,900 rupees, which is 19% more than what it was in November last year. In November last year, a liter of petrol cost 95 rupees 41 per se in Delhi. If all marketing companies attract the rise in crude prices, then they should be selling petrol for 113 rupees 47 per se or 18 rupees more right now. Over the past week, it has been repeatedly raised every day and now petrol costs 100 rupees 21 per se in Delhi. Now that is still 13 rupees away from what it should be if oil companies were allowed to have the same profit margins that they had in November last year. But that would mean runaway inflation, which no government can afford and our economy cannot afford either. Why? Because while petrol is largely used for personal transport and maybe more by the affluent section, diesel prices affects everyone because it is largely within the public transport space and also it is used to transport goods from one place to another. It is used by farmers to run their water pumps in their fields and it is used by factories to run generators where electricity supply is unstable. The Modi government knows that petrol prices can be politically sensitive, which is why even though petrol and diesel prices are supposedly fixed by market forces, they were not allowed to rise ahead of the crucial state elections that took place recently. Now technically, there are no elections coming up till the end of this year, which means it is possible that you and I will have to pay more, at least for petrol, if not for diesel. But does the government really need to increase prices? No, because the large part of petrol and diesel prices are government excise duties because it's the easiest place for the government to get its taxes. It can replace that with higher taxes on the super rich. It can replace that with higher taxes on the capital markets where the rich and affluent have made a lot of money. And it can also replace it by borrowing more and increasing the fiscal deficit at a time when petrol crude prices have gone up. Also, there is no reason for oil marketing companies to be allowed to continue to have these huge profits that they had when crude prices were low. Go to any oil company balance sheet and you'll see that they've had very good profits for the last few years. They should be told that they have to adjust to lower profit margins and live with it because the economy cannot afford to have very high fuel prices. And more importantly, many of these oil marketing companies are in the government sector. The government can decide and tell them to reduce their profit margins. So the government can actually ensure that you and I don't have to pay more because crude prices are going up and also that the poor are not affected, especially with a fuel like diesel going through the roof. That's the show today. Keep watching news click like this video, share it and do subscribe to our channel as well.