Why the price of petrol is increasing and what is OPEC and its role in it ?

Once the price of petrol is used to be 75/lit but now it is almost 110/lit. 21st century when the technology and lifestyle is in its culmination then this price of petrol haunts middle class people but what is the reason and who is behind it ? Is there any chance of decreasing the price ? Let’s discuss all the point one by one.

First we talk about OPEC and OPEC+ . Recently the meeting had been held of OPEC and OPEC+ and in this meeting it has been decided that the there is not any chance in future of lessen the price of petrol.

First we understand what is OPEC and OPEC+ and  why it was formed.

In 1960 Saudi Arabia, Iran ,Iraq, Venezuela UAE decided together that we produced almost 80% of the oil of world. So that only we should fix the price of it together, there is no profit in making competition in ourself only. So they finally made a organization name OPEC with its HQ in Austria ( an European country). Later more country also join this organization. Now there are 14 country in OPEC and 10 in  OPEC+.

 So since 1960 OPEC has been deciding the price of petrol in world level but later corona came and all the Industries have stranded in lockdown. People also got stuck in their home and not allowed to go anywhere means ultimately the consumption of petrol was negligible . So there was steep fall in the price of petrol in that time and OPEC country had to suffer from huge loss because the economy of that countries only based on petrol . So that’s why they are hiking the price now just to compensate their loss. Now, you think so till when this price will be continued or is there any chance of lessening the price . To understand this you should know about the Output pact. Because the price of petrol only decides by OPEC country. And there was a meeting of  OPEC  country and they signed a pack called output pact. what is it ? 

In the period of lockdown whatever loss the OPEC country faced they are in planning to recover that. So they have decided in April 2020 that till 2 year they will lessen their production so that they can fulfill their loss what they had to face. As they reduce their production and the demand will increase then price will increase automatically and as they get more money for the same amount of product the loss would be compensated. This was their plan and it is called Output pact.

 According to it this plan was till 2 year means form April 2020 to April 2022 after that the plan was to get normal production but what is the issue that right now already price is touching the cloud and OPEC country extended the pact till 6 month more , means there is not any plan to produce the oil till October 2022.

So it is clear that there is not any chance of reduced price of petrol till October 2022. But is only OPEC country is responsible for hiked price or is there any other reason also ?

This is not the only reason there is one more reason also who is Indian govt. Now you must be thinking how ? In lockdown period almost every way has closed to get tax from public means the sources of Income has been closed but the expenditure of govt. is same as before. So govt. had only this option to get tax from public. So govt. added more tax in  petrol and get money from public to maintain its expenditure.

 By the way Indians are itself also responsible behind the hiked price because in this days people have found lots of Ideas or way to evade tax. But to run govt. it is very important to get money from public. So govt is also compelled to do that . 

Technically if we want to get at least some amount of reduce in petrol then everyone who is liable to pay tax , should pay their tax honestly so that govt. will not be compelled to do indirect money levy form public.