Cost Of Fuel
Fuel is a commodity that drives today’s era. Our dependence on it is very much prominent with its massive involvement in our lives, from kitchen to car its presence can be felt everywhere. And if in case you find your heavy dependence on this limited material hard to digest than try and imagine your life without it just for a day. Well, it is obvious that if a material holds this much of importance in our world then one has to pay a good price for its consumption. But unlike other materials this one does not carry a stable price tag with fluctuations seen in the cost of petrol on monthly basis.
Leaving the economist and other learned man aside, others are clueless of the reasons that cause cost of petrol to shift figures every now and then. And if not desperately, every layman once in his life must have given it a thought as to why it happens?
But before going into detail, it is important to know fuel and its different types. Well, fuel can be in form like petrol, diesel and LPG, all coming from a common source called crude oil that is found deep inside the earth. Also, it is this crude oil that has made good for nothing desert lands of middle east no less that a gold mine.
Coming to the factors that affect cost of petrol or any other form of fuel for that matter consists of a long list. Some prominent ones being – cost of crude oil (proportional relation), demand of fuel (higher demand, higher the cost), natural calamity (petrol prices rises due to limited availability), geographical location (difficult or far terrain leads to higher cost), petrol refineries cleanup period (supply reduces leading the price to rise) and exchange rate (petrol prices are originally set in U.S dollar that fluctuates on daily basis).
Though this is only the upper layer of the entire fuel cost mechanism but these factors are the fundamentals of the process. As said, it important to know the essence than the entire book.