- The Indian citizens were quite aware of why the fuel prices were kept in check soon after the elections were announced to the five crucial states, including the all-important Uttar Pradesh last year. People were also expecting a rise in fuel prices once the results were out. Thus, for five months, there was no rise in the fuel prices ensuring the common man could sail through challenging times without much harm. Then came the ill-timed Russian invasion of Ukraine which only further exacerbated the energy scenario across the world. As expected, the Indian oil companies slowly started raising the fuel prices and it has risen steadily over the past couple of weeks.
PC: Senwork
- As the Russian invasion of Ukraine shows no signs of abating, the increasing pressure on the all-important energy consumption has only moved northwards. No wonder, gas, and fuel prices are on the rise everywhere as the global supply chain takes a severe hit owing to sanctions imposed by the Western and European nations. India is not an exception either and thinking about the future would give jitters to concerned citizens, especially the poor. Even in the face of such debilitating challenges, Indians don’t mind sharing a sense of black humor now and then. In a recent report, a couple in Tamil Nadu have presented a bottle each of petrol and diesel as wedding presents.
- Of course, the 14 hikes in the retail price of petrol over the last 17 days may have influenced the choice of present. As newspaper reports suggest, in terms of purchasing power parity, India’s retail petrol is the third highest in the world at $5.2 a liter. In the case of liquid petroleum gas (LPG), India’s price of $3.5 a liter is the costliest in the world. Needless to mention, prices need to be seen in context. India’s retail price of petrol comes to 23.5% of average daily earnings. This level significantly shrinks the disposable income of a large section of the population. No one is left untouched as fuel prices feed into other items and push up the general price level.
PC: Indiamart
- The moot point to ponder over here is the price in India high only because of rising international crude prices. The answer is no as that’s just a part of the story. The increase in central taxes on petrol and diesel is a key factor. The central tax on petrol was Rs. 22.98 a litre just before the pandemic struck. Today, it’s Rs. 27.90 a litre, after Rs. 5 reductions in November. Recently, the Reserve Bank of India marked down India’s GDP forecast for 2022-23 to 7.2% from the 7.8 it expected in February. Against this backdrop, both the governments, the central as well as states, should make every effort to ease the burden by slashing fuel taxes. Such a move would help brighten the economic prospects considerably.
