Vinod Chandrashekhar Dixit
Many nations face higher inflation rates due to the rising oil prices in the world. As a consequence, the higher inflation rates have devastating impact on both production and consumers that leads to big difference between oil importing and oil exporting nations. Though the oil prices are market based Government can reduce tax as a populist measure.
High inflation, coupled with skyrocketing food prices, has botched to come down. The oil price rise results in a transfer of income from oil importing to oil exporting countries according to a shift in terms of trade. The increase in the price of oil has increased the cost of fertilizers which need petroleum or natural gas to manufacture. Natural gas has its own supply issues as oil. The rise in petrol price in turn has a rippling effect. As all the commodities are transported on vehicles that run on petrol or diesel, so increase in petrol price results in price rise of these commodities as well.
The additional burden of rise in fuel prices is becoming unbearable for the public and is another slap on people’s face. Petrol has become an indispensable part of our day-to-day life, and we can’t imagine our life without it. But, petrol prices are sky rocketing, and it is eventually going to affect each and everything that we use in our day to day life. Price hike affects only the low wages or fixed salaried middle class families as compared to higher wages salaried class.
There has always been a lot of discussion and debate on the hike in the prices of fuel. Most problems arise because of the unchecked growth of vehicles with low mileage or gas guzzlers. Fuel prices need to be rationalised. Much of the taxes from fuel pricing are used for development works. This, when clubbed with populist subsidies, becomes terrible. In spite of the heavy price hike, the rich continue to live the life they are used to while the burden is borne by the poor and the middle classes. As we are fully dependent on the international market for fuel, we need to cut short our dependence on it. What is needed is the development of bio-diesel, and more funds should be allocated for developing alternate sources of energy as well as develop high capacity goods and public transport system. What is also needed is a rethink on the deregulation of petrol prices. The increase in fuel prices has affected the most. Time has now come when we need to think of alternatives such as biofuels and solar power. It is to be remembered that petrol is inflammable, but the cost of the petrol is highly inflammable.
The author is from Gujarat and can be reached at: firstname.lastname@example.org