One more hike in the Petrol price and it is a huge hike for the common man. Yesterday (Wednesday, 23 May 2012) evening Government of India has decided to hike the petrol price by about Rs. 7.50 per litre. In 2008 and 2011, the petrol price was hiked by Rs. 5/- per litre and this time, it is the highest price hike. When the government announced its decision, it became a great blow to the common man. Right now, government has increased only the prices of Petrol but possibly to hike the prices of Diesel by Rs. 5 per Litre and LPG by Rs. 50/- per cylinder. When they hike the fuel prices, it creates a chain of reaction in the economy.
Fuel price hikes never affects the rich pockets but it will definitely burn the pocket of the common man. The price hike will affect the ordinary man in all the means through the rise in the necessary commodities. When the fuel price increases, first of all, it affects the transportation industry. When the transportation cost increases, it will be reflected on the prices of the goods transported also. In effect, all the basic commodity prices will go up and again inflation will be reported.
When there is inflation, RBI will instruct the banks to increase the interest rate on its lending. So everything becomes expensive to the ordinary people.
Update : May 28, 2012, 12:10 pm
Oil minister S Jaipal Reddy on Monday ruled out any price hike in diesel, kerosene and LPG very soon as we expected.
Update : June 2, 2012, 4:58 pm
State owned oil companies decided to reduce the petrol price by Rs. 1.68 per litre excluding the taxes. When taxes are added, the price reduction will be Rs. 2/litre. In Kerala, it will be only Rs. 1.68 per litre since taxes are not charged from the petrol consumers.