The daily revision of prices of petrol and diesel by oil marketing companies (IOC, HPCL and BPCL) has stoked inflation like never before. It has a cascading effect, which should be mitigated in right earnest by reining in prices not essentially in the same manner as the erstwhile Administered Pricing Mechanism (APM).
“Prices are jacked up by a few rupees overnight and then reduced by just a fraction of a rupee. The huge sums earned by Union government in the form of taxes and cess thereof are given away as freebies (populist schemes) in election year,” said A.P. Food Processing Industries Federation president and ASSOCHAM A.P. Development Council co-chairman P. Bhaskar Rao.
Speaking to The Hindu , Mr. Rao stressed the need to keep fuel prices under control, not exceeding ₹70 a litre as the high prices have set the inflation inching upwards to the detriment of the economy.
“It is belated but we welcome the ₹2 reduction in VAT by the State government. Our prices are now on a par with that of Telangana, Karnataka and Odisha, where our transporters used to buy the fuel when the prices back home were higher,” Mr. Rao observed.
As far as the revision of prices every day is concerned, Mr. Rao said it was prone to misuse where the petroleum outlets were not automated, particularly in rural areas, suggesting that it would be good to fix prices once in a month taking the average prices into account.
Mr. Rao said one thing that should be done urgently is to monitor the expenditure, including on non-mainstream (refining) activities, of the oil companies thereby rationalise the prices.
The Union government should bring auto fuels under the purview of GST to bring pan-India uniformity in their prices. If brought under the new indirect tax regime, petrol and diesel prices will come down by at least ₹20, which will be a big relief for the consumer.
