Karnataka commerce & industry chamber slams fuel price hike

"What is worrying is that the current hike comes just a day after India's food inflation had soared to a 10-week high of 9.13 per cent for the week ended on June 11, 2011," FKCCI said in a statement.

FKCCI said increase in the fuel prices would have a cascading effect on other sectors.
Diesel being the fuel for the transport sector, would add to the transport cost and hence would lead to further inflation, FKCCI President N S Srinivas Murthy said.

Th industry body added, "This price hike will push the country's economy towards crisis. How does the Government expect people to put up with such price hikes every two months?"

This hike, FKCCI felt, would further increase inflation and "it will continue to daunt us and would bother us both at Industry level as well as domestic level".

After showing some signs of easing off in late March 2011, it has again reared its head in the first half of April 2011, to touch nine per cent, FKCCI said.

"What is more disturbing is increase in inflation of both food items and manufactured products. In such a scenario will the Government again opt for the only solution it has i.e. increase the bank rates?" it said.

It is unfortunate that the Government has pared customs duty on crude by five per cent and diesel by two per litre and says "it is modest and minimal". It is not understandable why the Government should resist fixing taxes from ad valorem to specific duties, FKCCI said.
FKCCI also urged the Karnataka Government to reduce VAT and Entry Tax on diesel so that the common man will have some relief.