Petrol Hike Affect to India People

Topics: Petroleum, Cost, Price Pages: 2 (657 words) Published: July 19, 2011
India has 2nd largest population in World, everyone knows that. Government has lot of options to make tax money and lower cost of fuel and cost of many other things by covering that tax money and applying it to keep prices of fuel and other things low. Actually they do not even need to search for more options. All they need to do is, make sure all follows laws of tax. Implement it, and apply it well. Fuel price must be kept lowest, that’s best way to control price rise and allow common people a chance to make their living. It may sound simple, but same time its also not impossible. If the price of petrol stands at Rs 58.90, the break up of cost as calculated by the Indian Government is as follows: * Basic Price: Rs 28.93

* Education Tax: Rs 0.43
* Dealer commission: Rs 1.05
* Excise duty: Rs 14.35
* VAT: Rs 5.5
* Petrol Custom: Rs 1.54
* Crude Oil Custom duty: Rs 1.1
* Transportation Charge: Rs 6.00
* Total price: Rs 58.90
In, any cost hike, one common factor amongst all items, is “Fuel”. If fuel price goes up, price for everything will go up. Simple way to explain is for example, if all vegetables, and things of basic needs are exported from state to state in trucks, than due to raising cost of fuel, transporting company will raise it’s price. Even though farmer who grows vegetables does not hike price to start with, but due to cost of fuel, which is involved for transporting vegetables from farmer to the markets/shops goes up. So, market buyers will have to pay more to transport company, and to cover that, they will have to hike rates of vegetables they selling. In this sense, every person who is either a seller or a buyer, they both have to earn more to cover their costs or to maintain their lifestyle, so all in their businesses, or professions, will raise their prices. Every man, rich or poor gets affected by it in this way. Families who earns well, will be able to manage it but what about common people like labor...
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