Elections Gone Fuel Price Hike On

Petrol and Diesel prices have been hiked at least 21 times since May 4, which was the first day when OMCs started hiking rates after assembly election results for four states and one union territory were declared. The price of petrol has gone up nearly Rs 5 per litre in the last month, while diesel rates across the country have increased by Rs 6 per litre.Though the hike comes in the wake of rising global crude oil prices, higher petrol and diesel prices could cripple economic recovery over the medium-to-long term, according to experts. In several research reports, economists have indicated that rising fuel prices could lead to which is a key requisite for economic recovery. Those who own a personal vehicle are directly feeling the impact of rising petrol and diesel prices, and many households have been forced to either cut down on fuel consumption or reduce spending on other discretionary items. Even people who do not own a personal vehicle are likely to spend more due to rising petrol and diesel prices. The higher spending will be due to increased commodity prices, surge in online delivery charges and public transport. It may be noted that a rise in fuel prices directly impacts costs incurred towards essential goods that have to be transported over long distances. Even services like online deliveries — that are in high demand during the pandemic — cost more now due to higher fuel prices. The one way to provide immediate relief to citizens is through a reduction in high taxes on petrol and diesel. At the moment, the country’s central and state governments levy the highest taxes on the two essential auto fuels. While the high taxes have provided a cushion to the government’s revenue during the pandemic, the longer economic impact and demand equation is something that authorities should be concerned about, according to experts.

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