<p>The consecutive increases in the prices of petrol and diesel, being effected by the government, lack economic logic and political sense, and may only be termed callous and insensitive measures in these difficult times. The prices of both fuels went up for the 12th time in as many days on Thursday, with a hike of 54 paise for petrol and 61 paise for diesel. Petrol now costs Rs 80.33 as against Rs 74.79 on June 8, and diesel Rs 72.68 as against 67.11 on June 8, in Bengaluru. A steep hike was also effected in the price of aviation fuel (ATF) for the second time in one month. Fuel prices had been frozen from March 16 and now they are being increased relentlessly. The government had hiked excise duty on both petrol and diesel in March and May, earning an additional revenue of Rs 2 lakh crore, but this was not passed on to the consumers. </p>.<p>The cumulative increases have taken petrol and diesel prices to two-year highs when crude prices are near their bottom levels. About 70% of the retail price of fuel comprises taxes and duties that go to the Central and state governments. The base price of a litre of petrol supplied to the dealers is just about Rs 20. The rest include taxes and commissions. It needs to be pointed out again that the consumer did not benefit when the international prices declined but always had to bear the burden of an increase in prices when the global prices went up. This is against the basic premise of the deregulation of petroleum prices and is an unfair business practice. The ATF prices were reduced during the lockdown period when airlines were not operating flights but have now been sharply hiked after they partially started commercial flights. </p>.<p>The government should be trying to increase liquidity or at least maintain the existing level of liquidity so that people spend money and increase demand for goods and services. That is necessary to counter the slowdown caused by the lockdown, but the government is instead taking money from the people. The steady increase in the price of fuels is also likely to spark inflation. The fuel demand, which had fallen to 30% of the normal levels in April, has now recovered to 80-85% of pre-Covid levels with the phased reopening of the economy. It is wrong that the government is only thinking of lining its own pockets when people are suffering. </p>
<p>The consecutive increases in the prices of petrol and diesel, being effected by the government, lack economic logic and political sense, and may only be termed callous and insensitive measures in these difficult times. The prices of both fuels went up for the 12th time in as many days on Thursday, with a hike of 54 paise for petrol and 61 paise for diesel. Petrol now costs Rs 80.33 as against Rs 74.79 on June 8, and diesel Rs 72.68 as against 67.11 on June 8, in Bengaluru. A steep hike was also effected in the price of aviation fuel (ATF) for the second time in one month. Fuel prices had been frozen from March 16 and now they are being increased relentlessly. The government had hiked excise duty on both petrol and diesel in March and May, earning an additional revenue of Rs 2 lakh crore, but this was not passed on to the consumers. </p>.<p>The cumulative increases have taken petrol and diesel prices to two-year highs when crude prices are near their bottom levels. About 70% of the retail price of fuel comprises taxes and duties that go to the Central and state governments. The base price of a litre of petrol supplied to the dealers is just about Rs 20. The rest include taxes and commissions. It needs to be pointed out again that the consumer did not benefit when the international prices declined but always had to bear the burden of an increase in prices when the global prices went up. This is against the basic premise of the deregulation of petroleum prices and is an unfair business practice. The ATF prices were reduced during the lockdown period when airlines were not operating flights but have now been sharply hiked after they partially started commercial flights. </p>.<p>The government should be trying to increase liquidity or at least maintain the existing level of liquidity so that people spend money and increase demand for goods and services. That is necessary to counter the slowdown caused by the lockdown, but the government is instead taking money from the people. The steady increase in the price of fuels is also likely to spark inflation. The fuel demand, which had fallen to 30% of the normal levels in April, has now recovered to 80-85% of pre-Covid levels with the phased reopening of the economy. It is wrong that the government is only thinking of lining its own pockets when people are suffering. </p>
