Published On : Fri, Jan 18th, 2013

Private oil companies get right to increase diesel costs

Nagpur News: After petrol, private oil companies have now been given the right to decide the cost of diesel as well, and have the right to raise their prices by 50paise per litre more than the market price. Diesel prices have a direct impact on the price of essential goods, daily use products, fruits, vegetables and other goods, as the rise in diesel cost increases the cost of transportation of these goods to the market.

The decision to deregulate petrol and diesel prices, taken by the Centre, has been opposed at all levels. The reduction in petrol price and increase in diesel prices in the city have put an additional burden of 26paise on Nagpurites, leaving consumers confused about governmental intentions. It appears that the administration is offering relief on one side and adding burdens on the other, with the imminent diesel price hike coming close on the heels of petrol becoming cheaper 30paise in the city. At present, petrol costs Rs. 77.56/ litre and diesel costs Rs. 57.17/ litre in Nagpur, while petrol costs Rs. 72.41/ litre and diesel costs 52.80/ litre outside city limits.

According to J. P. Sharma, head of Vidarbha Tax Payers Association, the rise in diesel prices is sure to lead to price rise. The rise on transportation costs may result in market prices of commodities increasing by as much as three times. According to Sharma, if the government puts 12% excise and 12% VAT on petroleum products, diesel will be more expensive by Rs. 45, petrol by Rs. 50 and LPG by Rs. 600 per cylinder. Sharma alleges that the government is wrongfully taking in Rs. 20- 28 per litre from excise and VAT of petroleum products.

Nagpur Truckers Unity President Kukku Marvah says, “The biggest problem for transporters at this point was availability of goods. The deregulation of prices is now another hindrance as it will raise transport costs even further, with trucks already being parked without being used for lack of goods to ferry.

Srinivas Viyanvar, Vice- President of Vidarbha Local Truck- Owners Association, says that rise in diesel price will increase transport costs to Rs. 100 per tonne per kilometre, from the present rate of Rs. 70 per tonne per kilometre. “If diesel becomes more expensive, transport charges will have to go up. With insurance and tyres having already become costlier, this new hike will create more problems for transporters. Moreover, there are many passing problems that the government is not looking into”. Viyanar is strongly against hike in prices of diesel.