Fuel price hike

Fuel price hike

The government has decided not to roll back fuel prices. According to government the wholesale price will be pushed only by .4 percent. So what’s the big deal? It seems the government has forgotten the sky rocking prices, which we have seen in last few months. I remember,6 month back I use pay around RS 20(even less)for 1 kg sugar. Now its around 45 per kg, almost more then double. Similarly price of all most every thing has gone up by double.

In one of the statement given by the congress party(the ruling party)it says the party will study the impact of price hike. Don’t you think this is so illogical, these things should have been done before the general budget and in any case these studies should be done by the Gov. of India?
The reason given for the fuel price hike is that it's important for the growth of the country. The entire issue of price rise of fuels is more to do with the timing, and not the economics behind it. At a time when the entire country is gripped with probably the worst food crisis ever, it was completely unnecessary to think in favor of the oil companies and not think of the common man's pockets, this price rise will not go down too well with the people of the country.
Among the UPA partners only Sharad Pawar-led Nationalist Congress Party is in favor of the increase while the Trinamool Congress and the Dravida Munnettra Kazhagam (DMK) have made it clear that they want a roll back.
Sharad Pawar might be looking for an excuse to save him self. After all he has been blamed for the price rise of sugar and other agriculture product as a union Agriculture Minister. Now he can say the price rises in essential commodities are due to hike in fuel price.

Prime Minister Manmohan Singh has virtually ruled out any rollback in the price hike of petrol and diesel as announced in the budget, saying that the direct effect of the hike in fuel prices on wholesale prices will be very less.
As an economist what we can expect from our PM .He seems to be more interested in the theory of development based on statistics and graphs. For him it is important that on paper the growth of India should be at least 9% or more. After retirement he will have something positive to write into his resume (he already has an impressive one).

The government owned oil company are in loss is The reason given for the hike in fuel prices .but looking at break up of fuel price, I don’t understand how these company’s are in loss.

We in India pay high taxes and duties on petrol and diesel, higher than some developed countries like the United States and some European countries. We pay approximately 52 per cent tax on petrol (duties, taxes like customs, excise, sales tax , VAT, dealer commission) and 31 per cent on diesel. It doesn’t seem fair does it considering that incomes here are much lower than in developed countries!
In the form of taxes, the government is making profit of almost 50 %. So where is the loss?
The government should share some of its profit with these oil companies, so that they can cover there loss and the common man is not burdened more with the price rise.
By the fuel price hike 40 % of our country men might not get affected, but what about the rest 60%.
So it is important that the government should not only think about the development of country in terms of statistics and graphs but should also take care of common man, while taking such decision.