The road transport industry is aggrieved 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 input cost in running of vehicles, and most of the work is contractual in nature. The decontrol regime will result in frequent fluctuations in diesel prices which would hit commercial 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 release, the All India Motor Transport Congress (AIMTC) has stated that the commercial vehicles segment will be the worst affected by the latest 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.
Diesel price hike is a very sensitive issue not only to the road transport industry but also to the common man and the farmers 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.
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 comman 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 international crude prices.
The press release further states that the road transport industry won’t be able to absorb any imminent hike in diesel prices, and suggests 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 Government is siding with oil companies which should reduce production 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 prices in India are out of sync with the paying capacity of the common man and the new decision would send inflation, already touching double digits, 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.