Oil Marketing Companies (OMCs) revise rates of petrol and diesel at regular intervals based on the average price of benchmark fuel in the international market in the preceding 15 days, and foreign exchange rates. International oil prices soared in recent days. Fuel prices differ from state to state, depending on the incidence of local taxes, like VAT and freight charges.
“The impact on the household economy is catastrophic with almost every commodity getting dearer by Rs 1 or 2 a day. The budget has gone haywire and expenses are steadily eating into savings,” said Rittwika Khasnabis, a working mother from Bhowanipore.
Essential commodities, like edible oil, rice, salt, medicines, and milk, are getting dearer by the day, and the impact on goods transportation is higher. “A spike in diesel price will increase the transportation cost of every commodity. The country’s entire transport system runs on diesel. If the government keeps adding taxes on diesel, the crucial balance will be lost,” said Subhas Chandra Bose, president, West Bengal Federation of Truck Operators’ Associations.
Both state transport undertaking (STU) and private bus operators have scaled down their operations due to non-viability. “Unless the taxes on diesel are rolled back and fare is revised, the entire bus transit system will go moribund. After a point, it will be next to impossible to revive the system,” said Tapan Bandyopadhyay, secretary, joint council of bus syndicates.
Cabbies have found that taxi operation has become a loss-making proposition even after charging Rs 50 above the metered fare.
Internationally, diesel is priced slightly higher than petrol because of its higher cost of production. In India, diesel remained subsidized for a long time. Now, diesel attracts less tax between the two auto fuels, keeping its prices lower than petrol for the last several years.