The Government has very cleverly put the onus on oil marketing companies to decide on a change in diesel price by a ‘small margin’ from ‘time to time’. While granting freedom to oil companies to effect the diesel price hike, there is conspicuous absence of any regulatory mechanism or watchdog to safeguard the interests of the common man.
In a press release, the Bombay Goods Transport Association (BGTA) has stated that diesel is the highest input cost in running of vehicles, and most of the work is contractual in nature. The decontrol regime would lead to frequent fluctuations in diesel prices which the poor commercial vehicle owners cannot absorb. A correction in freight is highly unlikely with the sudden fluctuation in the diesel price due to contractual obligations.
The commercial vehicles segment will be worst affected by this change that will result in frequent hikes in the diesel price. The industry won’t be able to absorb such hikes in view of the ever-increasing cost of tyres and spareparts, as well as the mounting penalties at the RTO, police and Commercial Tax department levels. The higher cost impact on the transport sector would mean an escalation in transit costs.
The Association strongly feels that the diesel price hike would not only hit the road transport industry but the common man and the farming community across the country who continue to bear the brunt of spiralling inflation. Regular pleas to the State Governments to reduce petrol and diesel taxes which are the highest in the country have so far fallen on deaf years.
The press release further states that the diesel price deregulation would seriously retard the already slack pace of economic growth and that the current Government stand should be revised forthwith in the interest of the common man and the road transport industry.