The cascading effect of diesel price rise is bound to be felt

With no let-up in the increase in prices of essential commodities during recent times, consumers from lower and middle income groups are set to be affected even more by the recent rise in diesel prices, and the rationing of cooking gas.

The news of the Rs.5 hike in diesel price, and subsequent announcement by All India Motor Transport Congress about a 15 per cent increase in freight charges have already sent the end consumers into despair.

Cascading effect

“Name a commodity the price of which has not increased in recent times. Prices of literally everything, including milk, oil, pulses, rice, and even vegetables are a lot higher, compared with those just a year ago. Prices nowadays go up without any reason. Now the government is giving them a very valid reason,” fumed Nageswar Rao, a commercial artist from Snehapuri.

The cascading effect of diesel prise rise is bound to be felt, because production inputs as well as final commodities go through multiple phases of transportation before they are delivered to the end consumer. It will be all the more aggravated by the fact that farmers are using generator sets to run their pump-sets.

Employees in the private sector, especially those in contract-based jobs, will be the worst-hit as their pay will not have any component of DA, which could be adjusted from time to time.

Incomes under strain

“I am from a traditional weavers’ family, but left the loom to work as security guard in the city. I am paid only about Rs.5,000 a month and made to work 12 hours a day. There is little increase in my salary since I moved here, notwithstanding the hike in prices of essential commodities,” says M.Narsimha from Dilsukhnagar.

However, the rich and affluent are much safer against both the diesel price hike and the rationing of cooking gas, not because they are covered by DA hikes, but because the percentage of attrition on their incomes through such fluctuations is negligible.

More In: Hyderabad