You are on page 1of 8

Are we ready for another petrol price hike?

Category »  Open Forum Posted On Wednesday, January 20, 2010

Obviously, the answer is NO.  We (aam admi), are not ready as well as mentally prepared for
another petrol price hike.  We have had fatal experience due to such price hike as it complements
to a relentless increase in prices of essential commodities like food grains, edible oil, pulses,
vegetables and sugar etc., as a result of the significant increase in transportation cost.   This s the
very reason that we could witness conspicuous impact in our deteriorating standard of living in
terms of not being able to afford the expenses of such essential commodities, which are
inevitable for our sustenance.
There are various internal and external factors which influence price of petrol/petroleum
products.  International market plays a vital role in price fixing of petrol.  In 2009, India has
spent $ 4.59 for getting per gallon petrol from international market while countries like USA got
the same quantity for $1.58. This price discrimination in international market ultimately resulted
in such steep rise in petrol price in our domestic market.  But  even now, price of petrol is very
high in India while comparing to USA and other countries.  We, consumers in India, pay RS.48/-
(approx.) for petrol per liter while consumers in USA get the same for RS. 17/- (approx.) in their
domestic market.  Soon after the formation of new UPA government, they had reduced the prices
of petrol but such attempt could not be seen after wards.
In short, government can only sort out the issue of steep price hike of petrol and has to take stern
measures to reduce the price instead of increasing the price. This would help to create conducive
atmosphere for aam admi to live in a society where he/she confronts economic inequality.
Babu George Athirumkal

What sort of a question you have posed this week? Did any government ever ask the consumers
whether they are ready for a petrol price hike? The government would keep increasing petroleum
product prices under pressure from the state-owned petroleum companies and due to increase in
international crude price. The government has been warning frequently the public to be ready for
another hike since crude oil prices in the world market had gone up. In fact, by the time this will
be printed, price of petrol might have been increased by Rs 3 per litre and diesel by Rs 2.
The moment petroleum products prices goes up prices of essential commodities would also go up
because of increase in transportation cost. This is a vicious circle in which the general public is
the biggest sufferer. After all it is the consumers who have to bear with the price increase.
Automatically, wholesale and retail price index would go up. The Central Government would be
forced to increase DA to its employees. Then the state government employees would start
agitation for several months and ultimately the state government would also have to increase DA
to employees. But what would the general public do, who are not government employees? Who
would help them from the price rise?
Neither the Central Government nor the State Governments have answer to this question.
According to a rough estimate more than 50 per cent of the present price of petroleum products
are due to various taxes imposed by Central and State Governments. The moment prices of
petroleum products are increased the state governments (ruled by other than the party in power at
the Centre) would start blaming the Central Government for the price hike.
In reply the Central Government would ask the states to reduce their sales tax to give relief to
consumers. But they would not like to reduce the sales tax charged on petroleum products from
the consumers. The more prices go up, the more tax revenue the state governments can earn.
Einstein's theory of gravity say that anything that goes up is bound to come down. That theory is
not applicable to price rise. It will keep rising and never come down.
Jyoti Rai

No, never, neither we nor any one Indian is ready for another petrol price hike. More than two
times within one year Government has increased the petrol price. There are few sources of
income for a government servant, a little businessman and other middle status categories.
Employees are getting hard for their bread and butter, due to rocketing price little businessman
are losing their business. One who is rich is being richer and poor is being poorer. Any type of
price hike, whether it is in petrol or grocery goods or another, customer is always found laden
with it. That is not only one problem, due to petrol hike, different problems would occur, like
hike to vegetable prices, milk prices, grocery goods prices, general stores goods etc., and who
would bear all this hikes - definitely it is middle and lower class poor customer who is born to
bear such all hikes. 
Even a single paisa hike in petrol price may result in price hike of different domestic things
which may cause demolishing of house hold budget.  In a nut shell it can be said that there is no
readiness for another petrol price hike.
Ashish Soni

Price rise depends on different factors namely- production as well as demand. As we know that
the use of petrol in our daily life is increasing regularly, accordingly if production does not meet
the demand, ultimately price rise become unavoidable. From time to time international market
uses to enhance the rate of increased petrol and its products. If hiking the petrol price is frequent
this must be checked by our petroleum Ministry in the form of financial subsidy. We are well
aware about the fact that now a days dearness is approaching sky high, in the same period if
petrol price is made costlier it will lead to the unexpected dearness and the poor people will find
hard to meet this situation.
Conclusively  it can be suggested that how long it is possible the price hike in petrol  be checked
however currently keeping in view the financial status of common people, who are the major part
of the democratic country.
RS Singh

In good olden days, whenever I witnessed too frequent  use of cars, I wondered if the people ran
them by water instead of precious petrol!
In the late '60s petrol price rise of three rupees per litre from Rs 6 raised widespread protests,
alas, in vain. Today the fuel cost is prohibitive. Before every increase in prices, the Govt denies
the price hike possibility. Every time the same arguments against price rise are advanced by the
society. And yet the Govt imposes its heavy burden, giving excuse that global prices are rising,
the OPEC has proposed price rise. Once the price is increased, there is no going back. But, very
rarely prices are slashed. Yet the monkey-business of reducing prices by just one or two rupees
per litre hardly gives relief to the public.
Road transport is the backbone of national economy. Each fuel price increase results in increase
in transport cost, to be offset by rise in passenger fare and goods freight. Thus the commonman
is saddled and economy is upset. This is quite a  vicious circle indeed.
Today despite unbearable cost of fuel, the brand new cars are steadily increasing. The terrific
traffic jams are increasingly choking urban roads, causing grim loss of precious fuel and precious
time. Bad roads, unscientific and too many speed-breakers, and overcrowding force use of lower
gears. This results in heavy fuel consumption, besides wear and tear of the vehicles. Looking at
the increasing new vehicles on our already overcrowded roads, one wonders if the increasing
price of fuel fails to deter such overcrowding! the law of demand and supply of fuel appears to
be obliterated by the black money..it appears that people have plenty of money to buy new
vehicles and fuel.
The price increase being beyond common man's control, let the Govt have its way! Yet the
vicious circle cannot be broken without strong willpower to resolve strict economy measures to
combat price rise. If people agitate violently for political issues, why can't they for economic and
financial ones? Gandhian civil disobedience be resorted to and passive resistance given.
The use of cheap public transport be promoted. Employees going to same place of work should
pool their vehicles by turn by common sharing. Use of one's vehicle can be reduced by going out
with a maximum agenda for a single trip. As in china, use of bicycles or walking to short
distances be made exemplary by self-discipline.
Improvement of bad roads, construction of subways and flyovers, effective traffic signals and
scientific shape of speed breakers are also urgent measures towards curbing fuel consumption.
All such little first steps are bound to ensure miles long travel on the fuel conservation road.
Such self imposed discipline and coordinated economy measures must help resolve this national
problem that is more chaotic in urban areas and affects the rural ones too.
Better said than done?
Who cares?
Arun Sarje

Every year the consumption of petroleum increases awfully all over the world. The energy crisis
which began in 1973 caused petroleum supplies to decrease and prices to rise exorbitantly. This
crisis forced developing countries to reduce or postpone important development programs, so
they could purchase petroleum to keep their economies operating. It created the urgent necessity
to find and develop alternative energy sources, such as other fossil fuels (coal, gas), nuclear
energy, and other renewable energy resources. Coal covers less than 1 percent of the world total
energy.. The nuclear alternative is undesirable; the associated accident risks, waste disposal
difficulties, nuclear terrorism, and nuclear weapon proliferation are dangerous in themselves, and
make this form of energy excessively expensive. Acquiring nuclear energy from the
industrialized world could, moreover, result in greater technological and economic dependence
on developed countries. A more feasible alternative to petroleum, coal, and nuclear reactors in
developing countries is the use of solar energy, which is renewable, abundant, decentralized and
non-polluting. Each day, the sun sends to earth many thousands of times more energy than we
attain from other sources .This energy can be captured directly as radiation. Taking into account
that the technology needed for exploiting renewable energy resources is simple and relatively
economical, it is important from a strategic point of view that energy planning in Third World
countries, particularly in the humid tropics, be oriented to developing the solar alternative. It
offers them one of the few opportunities to develop independently of the industrialized countries.
To this end, energy planning also must encourage energy conservation and optimize the use of
organic by-products and residues generated by economic and domestic activities. We have to
gear up firmly with non-conventional energy resource and rapidly switch to it totally .otherwise
be ready for another one, and afterwards another one petrol price hike frequently.
Dr. Visal A. Khan

Yes, We Should be Ready For Another Petrol Price Hike, if necessary. International prices for
crude oil have increased and are equally responsible for increase in barrel prices. But even then
the actual price of the petrol that we pay is much more than what it should be.
In fact, the basic oil cost is about 45% and taxation (including excise and sales tax) is about 55%
of the total cost. The difference in the basic and retail prices is on account of a heavy dose of
central and state taxes imposed on the two fuels.
Well the figures are just amazing and this sounds so absurd that we are paying more than 50%
tax on petrol and diesel. This is internal to the country. The government is responsible for how
the taxes are levied on goods and products and how it affects the end user price.
The taxes are mandatory for public growth and for keeping the public system ticking all round.
And then the question comes as to whether this much taxing is justifiable or not? Say if you
charge 5-10% of total tax including State and Central taxes then itâ€(tm)s justifiable. But if we
are being charged more than 100% then certainly itâ€(tm)s not logical.
The hike in fuel price will increase our day-to-day expenditure. All the prices of food, groceries,
daily stuff all increase but only our salary is not increased. How can we survive?
In fact Price Rise And Proper Usage Of Taxes Is A Highly Interdependant Correlation, which
cannot be and should not be ignored. We speak about price rise of fuels but we ignore it because
the issue in front of us gets replaced by another issue and we lose the track of what issue we were
dealing earlier.
According to me a vehicle is a necessity and not a luxury. There is little possibility of people
avoiding use of petrol.
I agree that the government is not responsible for this insane surge in crude prices, and is hence
not obliged to suppress retail prices indefinitely. What it can do is reduce duties and taxes and
exercise huge cost cutting in their expenditure and hence meet the extra burden of reducing taxes
through this. And also look for other sources of income.
If the Government is not be able to continue giving subsidies, the subsidies must be phased out
over time by the government.
If the full control is given to the oil companies, there will be competition and definitely going to
help the consumer.
Finally, Duties and Taxes on Petrol, Diesel, Kerosene and LPG Cylinder need to be reduced, as
this is great burden on common people.
PS Prakasa Rao

As a coincidence to the issue of this week's open forum the petroleum ministry's recent warning
in the media about an impending rise in the cost of petrol by Rs.3/- followed by another ironical
coincidence-- the oil conservation fortnight-- being observed these days are very relevant .
Leaving aside these developments, though of significance and relevance, the people are not
prepared for another hike so soon in the price of petrol (The petroleum ministry however denied
any price rise being in the pipeline).
In a monopolistic supply system, however, people cannot dictate their price and choice. It is so in
the case of petroleum products like petrol etc. There are no other supply channels excepting
those authorized by the government concerned. Petroleum supply and price fixation is also
neither based on a free market system nor competitive and transparent.Price fixation is an official
formula-based one and since there is  no competition the consumer has no option than to accept
whatever price is imposed on him.
As in other supply systems like water, power, food-grains,vegetables and other commodities of
daily needs, shortage is not the problem in the case of petroleum products too like petrol. The
problem is of mismanagement .There is lot of theft in the supply chain of petrol causing artificial
shortage. There is also hoarding and  a lot of misuse of fuel by the bureaucracy, political
executive and rich families who just for the sake of their pleasure and satisfying their vanities
drain out large quantities of petrol in their pleasure hunting.. If appropriate curbs could be
imposed on all these functionaries , corruption in the fuel trade may be reduced resulting in its
comfortable distribution amongst the consumers on reasonable prices.
With inflation rate rising , food grains, pulses, vegetable prices sky-rocketing none of the Indians
will be prepared to accept another price rise in the case of petrol at this stage. Such a step may
prove fatal also for the UPA at the centre although the public sector oil companies are under
heavy pressure due to the price rise of the barrels at the international level.
Krishna Chander Mouli

If the government wants to contain prices of essential


commodities as a priority number one, then they cannot raise the price of
petroleum products right now. That will go counterproductive, as these two are
inter-related. The mechanism to contain prices can be evolved only with the
help/cooperation of the States as various States charges different types of
taxes that determines the selling price of any commodity. That is the reason,
even in the case of petroleum prices; there are variations in the price per
liter in various metropolitan cities and States. Time and again, the central government
has stated that in containing prices, the States have to co-operate. Only
recently the central minister for Agriculture Sharad Pawar had stated this. Now,
after the union cabinet meeting convened and discussed the issue, the Prime
Minister has decided to call for a meeting of all State Chief Ministers to
discuss this issue. Unanimity is required to emphasize once again the need of
State governments keeping strict watch on prices in their respective States and
punish hoarders and black marketers that contribute to a great extent in price
escalation. As far as hike in petroleum price is concerned, it is always done
by the central government's Petroleum Ministry. Whenever crude price in the
international market increases, enough pressure comes on our petroleum minister
to come up with proposal of price rise and the public too will be left with no
alternative but to willingly or non-willingly adjust with such escalation. At
this time, the difficult problem being faced by the country is that prices of
all essential commodities are already on the rise, particularly sugar, which is
going to touch a record of about Rs. 50/- a kg which no one in this country would
tolerate. This is the only item, which is most essential for every household. The
Central government is opting for the supply of kits of essential food items
with controlled prices through NAFED but it is a gigantic task if it has to be
done throughout the country. The Central Minister of State for Agriculture K.V.
Thomas has stated this in Kerala the other day but he too expressed his
apprehension that there are still chances of its misuse, looking to the over-all
deficiency in our system. Looking to all
these, and particularly the pressure mounting upon the central government to
control prices, there is no chance at this time for another hike in petroleum
products.
R.K.Kutty

It is a fact that, there will be a hyperinflation again, if the price of oil hiked marginally. In India 
inflation accelerates, in proportion to  the prices of oil and petroleum products. Common man is
always against the price hike of any item including oil.  Since  oil prices  are having direct
impact  on the essential commodity prices , the proposed price hike on oil sector  definitely  have
a burden to  the masses.  However, as we see, common people have no other alternative left,
other than to keep ready for  any hike on petrol or  any other   products. The coming price hike
on oil and petroleum products may invite woes to the Govt by the common peoples, who are
already  passing through financial crises.
Oil companies  are  forcing Govt  to hike oil prices  to escape from the burden of subsidies and
discounts etc. The price hike on domestic and  retail petroleum products  has become inevitable
seeing the staggering  revenue losses and  under recoveries incurred by the oil companies. India,
by and large  imports  70%  crude oil requirements  from abroad due to this reason,  the rise in
international  crude oil prices  directly impacts  the cost of refined  products  in India economy.
The selling price of petroleum products  in some states is high including Madhya Pradesh  due to
higher slabs  local taxation, which should be either  controlled or make a uniform price at all
India level by  introducing  necessary legislation  by the central Govt. It is a sad state of affairs 
that the consumers are bearing the burden of higher rates of excise duty  etc  and they are paying 
higher prices on  oil and other petroleum products decided  by the oil companies  in the period of
six months interval.
C.Rajendran

The price of petrol and diesel has already reached the maximum level.  The hike in fuel price
result in increase of the price of essential commodities also including vegetables.  Common man
is always affected due to the frequent hike in price of petroleum products in view of the resultant
increase in the price of other commodities.  The central government has no consideration over
the genuine difficulties being faced by them due to the steep hike in prices of essential
commodities.  Hence, it is out of question whether the people of this country are ready to accept
the future hikes in petrol price.  They are forced to accept it as there is no other option before
them.
It is true that certain political parties in the opposition raise voice against the hike but the
Government never bow down before their protest.  The protest of opposition parties are also not
honest as their  aim is only to score political mileage out of this issue. With the passage of time
people get accustomed with the increased price and live accordingly.  The politicians and the
elected Government of the country   should therefore control the fuel price allowing subsidy etc.
whenever it goes up in the international market.  The question whether the people are ready to
accept another hike in petrol price has therefore no meaning at all in our country.
V.B. Rajagopal

We should be ready for a steep hike in petro prices because all the major
elections are now over. Congress has performed well in polls and they now
want to reward the people for the confidence reposed by them in the party.
Now there are no major polls in foreseeable future and the politicians and
their advisors know that it is the right opportunity to effect a steep hike
in petro prices.
The state-owned oil majors like Indian Oil, Hindustan Petroleum and Bharat
Petroleum have been telling that they lose not less than Rs.2,000 billion in
revenues on the sale of petrol, diesel, domestic liquefied petroleum gas
(LPG) and kerosene at prices below the import cost.
They have demanded a hike of Rs. 2 per litre in diesel and Rs. 5 per litre
in petrol in view of global trends. The oil company officials have been
saying that there is no option given the rate of crude oil in the
international market. However, the government didn't hike the petro prices
immediately as it would have been a very unwise decision in view of assembly
polls in important states. But now that the polls are over we should be
ready to face the inevitable hike in petro prices and it can come any day.
Prakash Shrivastava

We the Indians are silent majority that's why the prices of all commodities
are soaring high up in the sky without any check. When we can buy vegetables
and pulses at a very higher price than before, so the question of any
protest by us on another petrol price hike does not arise. As a matter of
fact there is no effect of price hike on the peoples of upper strata
because they have enormous wealth for meeting their expenses. The real
sufferers are the peoples of middle &lower class. The effect of price hike is
writ large on their faces.
Peoples in our country do not talk turkey on rising prices, merely they jaw away in every nook
and corner on this topic. We are in the know when the prices of all commodities are rising then
the petrol price hike is also expected and most probably very soon we will have to pay more
amount on petrol. To some extent price hike in some commodities is unavoidable but in most of
the cases price hike is due to hoarding and with the object of black marketing and due to
mismanagement of our govt. Govt should take some concrete measure for controlling present
rising prices. Public should also be vigilant and should not be ignorant about the activities of
corrupt businessmen who are operating near their surroundings and minting money by hoarding
and black marketing. If public will have an eagle eye on corrupt officers and businessmen then
we can control prices of all commodities which are soaring high up in the sky. Govt should take
stern action against corrupt and anti social elements in
case if they are caught doing hoarding black marketing etc. then exemplary
punishment should be given to them.
Syed Zia Ul Hasan Naqvi

You might also like