With both the UPA Government and the Opposition toughening their respective stand on the so-called second generation reforms as revealed in the policy decision to allow FDI in multi-brand retail and the diesel price hike of Rs. 5 a litre, a solution to the current economic impasse seems most elusive. It is to be noted that the previous diesel price increase of Rs. 3 a litre in July 2011 didn’t provoke so much opposition from the trucking and other industries relying on this fuel as the latest price hike. There is widespread resentment of the Government contention that the price hike is just unavoidable in view of the mounting world crude prices and the ever-growing under-recoveries of oil marketing companies (OMCs) on the sale of petrol, diesel and other petro-goods. However, the Opposition still maintains that the Government has all along ignored the general suggestion to reduce or roll back excise and customs duties on fuels and to cut extravagant expenditure by OMCs to pave way for providing relief to the fuel users.
All indications are that, with the Government reluctant to concede their demand for price relief, the trucking community will intensify its country-wide agitation. Already reeling under the impact of different taxes and levies as well as undue toll gate collections, road transport operators are left with no alternative but to pass the burden with a steep increase in transport charges. This would lead to a further rise in the general price level adding to the overall inflationary spiral. The emerging scenario would prove most inimical to the interests of the masses who are already paying higher prices for their daily necessities.
True, the diesel price hike must have enthused SIAM which has quite often expressed its serious concern over the huge imbalance in the car demand pattern, with undue favours shown for diesel by subsidising its price all along. Car makers too have recently announced limited period discounts for petrol cars mostly to check the general trend among customers in favour of diesel vehicles. Though the move to reduce the price differential as between petrol and diesel is welcome, the transporters’ agitation, the rising inflation, etc., are factors to be seriously considered by the Government before revising its overall fuel pricing policy.