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MOTORINDIA
l
May 2012
Move to decontrol diesel prices
resented
The road transport industry is ag-
grieved and pained at the decision
of the Government to decontrol the
diesel price regime. The decision
will have its dampening impact on
this sector. Diesel is the highest in-
put cost in running of vehicles, and
most of the work is contractual in
nature. The decontrol regime will
result in frequent fluctuations in die-
sel prices which would hit commer-
cial vehicle owners. A correction in
freight is highly unlikely due to the
sudden fluctuation in diesel prices
under contractual obligations. A
steep hike in diesel price will result
in enormous loss to the industry.
Expressing its views in a press re-
lease, the All India Motor Transport
Congress (AIMTC) has stated that
the commercial vehicles segment
will be the worst affected by the lat-
est Government move which will
result in a hike in diesel prices. The
road transport sector will not be able
to absorb such hike in view of the
overall rise in the cost of operation.
The impact on the transport sector
would mean an escalation in transit
costs and therefore a steep jump in
the overall price index.
Representations to the Central and
State Governments to reduce petrol
and diesel taxes have fallen on deaf
years. The Goan Government has
made a prudent decision to adjust
its taxes in the interest of the com-
man man. The State Governments in
general could not only emulate this
example, but the Centre should also
adjust customs & excise duties in
the light of the fluctuating interna-
tional crude prices.
The press release further states
that the road transport industry
won’t be able to absorb any immi-
nent hike in diesel prices, and sug-
gests that the Government reduce
excise and customs duties as well
as VAT on diesel, which constitute
around 50 per cent of the diesel cost.
Diesel and petrol should be brought
under GST, and there should be a
ceiling on taxes on these auto fuels.
In fact, it is allerged that the Gov-
ernment is siding with oil com-
panies which should reduce pro-
duction costs and overheads. The
neighboring countries have lower
rates, though they also buy crude oil
at the same rate in the international
market.
According to AIMTC, diesel pric-
es in India are out of sync with the
paying capacity of the common man
and the new decision would send in-
flation, already touching double dig-
its, spiralling out of control. Since
the trade will not be able to absorb
the cumulative effect of all these
decisions, it has expressed itself any
hasty Government decision.
w
lubes & fuels
Diesel price hike is a very sen-
sitive issue not only to the road
transport industry but also to
the common man and the farm-
ers across the country, who
continue to bear the brunt of
the inflationary pressure. This
would have its serious impact
on the general cost of living.