A day back, Where Oil companies announced a small hike of 50paisa liter on Diesel prices, Our Indian government, tried to balance it down by raising the supply of subsidized cooking gas to 9 cylinders/year on the older 6 cylinders/year. This could be a push to boost the Indian economy with business-friendly steps “BUT, is it really so?” This question came to me with the release of a statement made by our oil Minister M Veerappa Moily. He said “We have given some liberty to oil marketing companies to raise diesel prices in small dozes. They are authorized to make small price correction from time to time.” Raising the price of subsidized diesel in small amounts every month starting Friday in an attempt to prop up public finances without causing a popular backlash before elections-“in.reuters.com“.
On the other hand, State Owned oil companies are now promising to cut down petrol prices by 25paisa/Liter with a promise of free-market rates for supplies to defense, Railways, commercial establishments and state roadways. The hike or cut-downs will exclude VAT and other state related taxes. This revision in fuel prices may have an impact on the automobile sector, where the number of diesel opted consumers had increased to a percentage in last few month after the last rise in petrol prices. This may also impact the investments made in past, with diesel engine capacity by automobile companies.
In a bid to sweeten the bitter pill, The Indian government declares the tax-rates for crude palm and soybean oil imports as 2.5% while the tariff on purchases of refined cooking oils will be maintained at 7.5%. I wonder is this a chess which Government is trying to play with the common man or is it a real boost to our Indian economy? This may make our farmers happy for some time but, may not be of greater impact in near future as there are chances that these taxes may cut Indian imports too.
Quotes» Hike in diesel prices will affect common man in every way. While the sowing, transportation prices will escalate, consumers will have to pay more for each item. SOURCE: Times of India 2013-01-17 23:54:00
Economic Times; In.Reuters; FinancialExpress.com; Bloomberg.com