Fuel prices have risen to present levels as a result of the combined effects of rising benchmark Brent prices and various tax increases over the last few years.
The country’s transportation industry is agitating for change as record-high fuel and diesel prices leave some Indian automobile owners unable to afford the expense of driving their vehicles. Despite the fact that Brent is considerably below its top, fuel costs in India are at an all-time high.
Buying fuel in major Indian cities such as Mumbai costs nearly twice as much as it does in New York, casting a shadow on Asia’s second-largest oil guzzler’s comeback as virus-related transportation restrictions are relaxed. Last year, the administration increased taxes even as it declared a national emergency and world crude prices plummeted.
According to Indian Oil Corp. data, gasoline prices in Mumbai have grown by more than 25% in the last three years, while diesel prices have risen by one-third in the same time frame. Inflationary pressures are mounting in the Indian economy as prices rise in response to a broad commodity surge.
In India’s capital, New Delhi, gasoline prices have risen about 20% year to date, while diesel prices have risen similarly. Over the previous seven years, government taxes on fuel, which powers scooters and motorbikes, have more than tripled. Diesel users, the country’s most popular fuel, have increased sevenfold over the same time span.
Higher costs are affecting the country’s burgeoning middle class, which has been the engine driving India’s economic and oil consumption development in recent years. Truck drivers and millions of others, India’s budget deficit reached a new high last year, and fuel taxes constitute a consistent stream of revenue that the government has found difficult to ignore.
While India’s economy is slowly recovering from a 7.3 percent drop in GDP in the year to March, millions of people remain vulnerable. Unemployment is high, and the Pew Research Center projects that the country’s middle class will shrink by 32 million people by 2020.
With rising fuel prices, India’s truckers have had enough. According to the All India Motor Transport Congress, which represents more than 14 million truckers, bus, and tourist vehicle operators, drivers have limited opportunity to pass on increased charges, which account for over 70% of the cost of operating a truck.
The record-high fuel and gasoline prices have harmed the livelihoods of millions of small-business owners and wage earners who are struggling to make ends meet.
(News input: TOI)