HIKE IN PETROL AND DIESEL PRICES- A RIGHT DECISION
The government has finally taken a hard but correct decision to raise the price of petroleum products. The retail price of petrol has been raised by Rs 2 per litre and that of diesel by Re 1 per litre. The increase, marginal as it is, would reduce the revenue loss of oil companies by Rs 840 crore in the month and a half remaining in the financial year.
Political parties- BJP and the Left have already criticized the move, and that''''s what opposition''''s work is! They argue that the resulting increase in inflation will make essential goods such as food grains and vegetables too expensive for the common man to afford. But these goods will be affected by DIESEL PRICES ONLY and increase in the price of diesel is so marginal that it is unlikely to have much of an impact on food prices.
Petrol and diesel prices were last raised in June 2006, when the international price of oil was $67 a barrel. The price of crude this year is around $93 a barrel, a sharp increase from 20 months ago. As a result, oil companies have been operating at losses to the tune of Rs 71,800 crore in the current financial year.
Critics have also suggested that the government reduce the tax burden for oil companies. This is impractical and does not make economic sense. Doing so will increase the fiscal deficit, which will in turn create inflationary pressures.
The government has made the right decision, even though it might hit AAM AADMI but the middle and lower class people are hardly effected by the petrol hike while for HIGH class people, it doesn''''t matters if the hike is 2 RS or 3 RS.