Petrol Price Hike

So Finally the Petrol Price Hike is here and I guess most of you would have already read / heard the news.  And I am pretty much sure, similar to my tweet mentioning RIP Cars, a lot of expressions would be seen in coming days both in the cyber space and otherwise.  I already got a BBM message that Government rather than lowering taxes on oil is increasing the price.  I am sure now many more messages, tweets and emails would float that would compare the Oil prices across South Asian countries and peg that Petrol prices in rest of the South Asian countries are much lower than what it is in India.  But at the same time, the same set of people would forget to make a note that other than Petrol there are other set of fuels ref Diesel, Kerosene and LPG where India has the lowest cost per unit (ltr or gas cylinder).  Other than Petrol, all the other forms of fuels as mentioned above are on the cheapest side in India.  Compare the Cost of 14.2 Ltr LPG cylinder in India v/s rest of the countries and you would find that the LPG Cylinder in India costs at least Rs. 150 lesser than any other country and almost 50% lesser than what the price is in Pakistan.  Similarly the Cost of a ltr of Kerosene in India is around Rs. 12 where as it is almost double or triple in other countries.  

So before we actually start the comparison on Price of per ltr of petrol in India v/s any other South Asian Country, we need to be sure that we check the comparative chart of the other sort of Fuel that we consume in our day to day life, in some or other way.

Also, if we are looking at the comparison of Fuel Prices in India (specifically Petrol) v/s rest of the World, then please be assured that India is still on cheaper side than most of the other counties.  A report from FIA can be accessed at Fuel Prices Worldwide.  Though this report should see a change in the overall position of India with the price hike, but I do not see India Slipping more than few cents and dipping below Australia.  That's the only change I would see in case of "Comparison with rest of the World".

Another point that we might hear - Why not hike Diesel Prices or Kerosene Prices? So let us understand that if Diesel Prices would be touched, there would be a serious hit on the rate of Inflation. Hike in Diesel prices would directly increase the cost of transportation for the various essential commodities as well as vegetables and grains. That would been increased cost of Final Products.  And as is one of the recent research reports have indicated that prices of commodities and food stuff is already at all time high (63% upward movement in Food Prices in Last 8 years - Food prices double in UPA's term as demand outstrips supply - The Economic Times). So that means the Hike in Diesel Prices is ruled out for now.

Coming to the Kerosene, well I am sure Lot of Political Anguish will have to be faced for increasing it even by Re 1.  And mostly the Ammas, Behenjees and Didis would start creating the fuss around the impact it would have on those below the poverty line as they are the ones who use Kerosene the most.  Certainly, neither the Government would like to spoil its own vote bank nor would it like to have any issues with its allies.  Certainly a lot of Political Angle and Apprehensions involved.

Now remains LPG, then it would be another problem as it would hit the entire range of classes or say masses for that matter. Any hike in LPG would have direct impact on the folks from all the strata of Society. Be is Lower, Medium or Higher Income Groups, they all will get impacted by it.  Then the Cost of eating out would also increase due to increased fuel cost and that means the overall monthly budget would be hit more than what it would hit in case of hike in just Petrol Prices. Again a lot of Political Ambitions would be flamed if the prices are hiked for LPG.

So, what is wise to do now?  Well there are few common steps that if we follow can help us keep our Budgets in shape.....