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Thursday 30 August 2012

Government Makes Sure There Will Be No Petroleum Price Hike

When it comes to the overall price of petroleum, it is easy for oil companies to raise the price consumers pay at the pump without a moment’s notice. Oil is purchased by the barrel, and it seems to instantly raise in price anywhere from a few cents to several dollars in a day’s time, without much going on in the world. Of course, there are several different aspects as to why the gas price may increase for consumers, but often times it is bewildering to many buyers as to why gas prices rise, especially during the weekends. Although this is an issue that will always be an aspect of the oil industry, you're going to find there are some ways the government is able to make sure the price of petroleum does not rise. You'll often see this put into effect during holiday weekends, in which individuals are more likely to drive.

When it comes to what is taking place in India, it is necessary for the government to step in. The price of petrol is constantly on the rise, often drastically, and is causing a bit of an uproar throughout the entire nation. The price has become so out of hand, the government must take several drastic measures in order to ensure the price does not become so out of reach for the millions of individuals inside the country who rely on the product.

When it comes to the government, they can put out a watchdog to make sure companies are not just gauging customers. These individuals are able to take into account the current global trends and market values and determine of the oil companies are increasing the price at the pump, just to gauge consumers. On top of this, they are able to release additional gasoline from the national reserve. Usually, the national reserve has a few million barrels of oil sitting around on stock, and by releasing this amount, it is able to reduce the price at the pump. Although this is usually just a short lived solution, it does prevent such companies from increasing the price of petroleum for no particular reason.

The Indian government also has gone in and tried to mandate a few regulations as to what the price of petrol is able to charge. Recently, the BPCL cut the price of petrol by Rs 1.5, which nearly chopped the entire price of petrol in half, down to 2 a liter. This helped make the price of oil far more affordable throughout the entire country. Even through the price of oil has gone up throughout the world, as the cost of a barrel of oil is constantly fluctuating, no matter what is taking place, the sudden 11 percent price hike in petrol prices went into effect for major oil producers, in order to cut the losses of 6 to 8 Rs which they often received while selling the petrol. The overall reduction in the price of petrol is a thankful relief, although it is still possible for the oil companies to fight this and try to increase the prices still. Hopefully the new government cut in price stands.

With the price of petroleum constantly fluctuating, it is difficult to know when the price is increasing due to legitimate reasons, or when the price of gasoline is increasing due to what the company feels like charging. With the help of the government, you know you aren't going to be gauged for the price of oil when you're at the pump or for your utilities, which is why you know the government is there to help you out.

Jessica Branning is a contributing news writer for travelinsurance.org

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