Oil companies in India have given the government an ultimatum that if excise duty is not cut or they are provided with compensation of about 50 crores a day, they will raise @Rs 8 per litre with 20% VAT, that makes more than Rs 9. Indian Oil Corporation (IOC) chairman said that they have reached the limit of borrowing money for producing petrol for the country, they can stretch it more.
As price of petrol is soaring to its extreme high plus traffic is increasing equally because of festival time, Leipzig in Germany, made its public transport free for four days, to lure people for it in the long run. Good marketing strategy, I must say. But I am not sure, this strategy will prove to be success. What say?
Variation is price of petroleum, reflects its effect, immediately on the global economy. In last 3 years, price of petrol has raised almost double and so the inflation, world wide. As we know, pricing and so economy depends on demand and supply. If demand is more and source are depleting, very obvious the pricing will increase and so disturb the economy.
Lets give a look to largest consumers of the petrol, which raise the demand of it.