Monday, February 7, 2011

Impact of petrol hike on Aam Aadmi

What is the Aam Aadmi’s reaction to the recent hike in the petrol prices? Surpsingly not much. On the contrary while there were strong reactions everywhere for the recent hike in the price of onions due to shortage of supplies, the recent hike in the petrol fare seems to have made hardly any impact. The worst affected ones who depend heavily on their automobiles for their daily work or for commuting have already devised ingenious measures to cut down on the consumption of this ‘liquid gold’.

The common man, especially the daily commuter, who refills his petrol tank almost every other day has taken the recent hike in his stride of accepting the reality, as there is nothing much he can do. Though it burns the pocket a little deeper he has no other option but to continue to refill grudgingly.

The Center’s decision to de-regularize the prices of petrol and bring it on par with the international prices was a welcome relief to the State Oil Corporations to contain their mounting losses though its impact on the economy, especially keeping the inflation in check, is considered marginal. But any increase in the prices of diesel would have had a disastrous effect as it would have triggered increasing the costs of transportation of goods as well as public utility services in addition to irrigation pumpsets which depend on diesel.

Fortunately the common man can heave a sigh of relief for there has been no increase in the prices of the other three petroleum products namely diesel, kerosene and LPG. Sale of adulterated petrol in shady shops at street corners will pick up, which the authorities should take measures to curb. Instances of autowallas fleecing unsuspecting passengers demanding more than the regular fare citing reasons of petrol hike have been reported, though it is already made mandatory for them to run on LPG.

Indian Express spoke to a cross section of the public in the city eliciting their views on how they are coping with the recent hike in the prices of petrol. Here are the excerpts:

Increase in demand for home delivery
Demand for direct home delivery of groceries and other essential commodities from regular customers is on the rise, observed a couple of traders, who otherwise would have made frequent visits to these shops to purchase their monthly or weekly home needs, thereby saving fuel costs for the round trip. The traders too on their part are forthcoming by clubbing a couple of orders received from the same locality and delivering them on a specific date.

Sale of gas conversion kits is on rise
Owners of private vehicles and taxis are increasingly going in for conversion of their petrol driven vehicles to LPG using the commercially available gas conversion kits approved by the government. Despite commercial LPG cylinders also getting dearer, when it comes to kilometer-wise consumption, vis-à-vis mileage and pick-up between petrol and LPG tank fitted cars, conversion is still considered a viable option. Mechanics installing gas conversion kits say that after the petrol prices started shooting up their business has improved.

Enquiries for electric bikes goes up
Dealers of battery operated electric bikes are receiving more enquiries in recent times. In spite of these bikes never matching the conventional petrol driven ones in terms of speed and quick acceleration, sale of these vehicles is gradually picking up. Nowadays more number of parents are opting to buy these vehicles for their college going children whereever it has become essential, thus saving on payment of excess money every month for the fuel in addition to paying for their regular pocket money.

Adopting time management techniques
Though most parents insist their wards to walk to their schools or colleges when they are located nearby, parents who are still dropping them off in their four wheelers or bikes are resorting to time management techniques so that they can drop them on their way to work or office instead of making two separate trips. For those who already own a vehicle, their parents have begun restricting their kids to take them out only in case of emergencies or just once a week. For the rest, school busses and autos ferrying children remains the only economical option.

For most housewives who regularly purchase vegetables from the market or go shopping weekly once in their two wheelers, have now resorted to purchasing the same from the road side vendors selling vegetables on pushcart, inspite of it being a couple of rupees more expensive.

Hike in service charges
Some tourist and travel operators who are still running petrol driven vehicles have begun hiking their fares by one to two rupees per kilometer, charging anywhere from Rs.5 to Rs.6 per km. Private courier operators who have to depend on vehicles for their daily disbursement of mails and parcels are contemplating to hike the charges by a rupee or two in the near future.

Mobile phones come to the rescue
While cost of communication is becoming ridiculously cheaper with mobile companies dropping their call rates to paisa or sometimes even half-paisa a second, some specific businesses have found it more economical to conclude their businesses over phone rather than actually make a physical trip, unless called for. For example some real estate agents are asking their potential customers to visit the site for inspection on their own, providing all the details over phone and wait for the customer’s response instead of attending to every one of them personally thus saving time and money.

Options before the Government to tackle price hike
The price hike has heightened the need for better public utility services and also speeding up works on the much awaited Mysore Metro. Also, popularizing vehicles running on alternate fuel sources like solar power and battery, by providing more subsidies to the manufacturers, will bring them within the reach of common man. It is also time the Centre considered reducing the Customs Duty on crude oil, which Pranab Mukherjee had on Feb. 26, 2010 imposed a 5 per cent import duty on crude oil and hiked the same on petrol and diesel from 2.5 per cent to 7.5 per cent .

People’s reaction to the hike:
“If city roads are improved it can be a great advantage for all riders. Unnecessary fuel consumption is reduced. As I am in the marketing field there is no chance of using less petrol. The waiting time at traffic junctions for the green signal should be reduced.”
- Sunil Giriyan, Medical (Drug) Suppliers.


“Petrol hike has forced us to borrow more pocket money from our dads. Our chat outs has been cut off. We have stopped going on trips and long drives. If it continues to increase like this, we may consider the option of going for a battery operated scooter.”
- Balraj, St. Philomena’s College, II PUC and Antony, 1st year B.Com, Banumaiah College.


“They are hiking the prices so many times in a year, it has indeed become very difficult to manage. It is also causing more pollution as many of them are using adulterated petrol. The thick smoke emitted from such vehicles is also causing several health hazards.”

- Nagaraj, Head Constable, KR Traffic Police


“Car pooling should be made more popular in Mysore as it is catching up in Bangalore . Also if the public transportation system is made more efficient, especially if adequate busses are provided on busy routes the dependence on using private vehicles comes down.”

- S.Sharath Chandra, Businessman


“Like in China , in India too people should start using cycles at least once a week. Awareness on this should be created through media. It improves the economy and one can remain physically fit too.”

- Poonappa, Businessman.


“Petrol has become one of the essential commodity and there is no other alternative for the people. Customer response will be the same regardless of however much it is increased.”

Prop. Ganesha Petrol Bunk.


“My daily routine has become miserable. I am now using vehicle only for long distances. I heard that it is only in our state the price is so high. I am surprised why is it so?”

- Nalini VV Mohalla


Details of the petrol price hike in recent times:
"The price of petrol was around Rs.50 in metro cities during the period June 2008 to November 2008.

In December 2008 and January 2009, twice the UPA government reduced the prices, though it was marginal. But since July 2009 prices began rising again.

In February 2010 the rates were increased by around Rs. 3.

The government decontrolled the petrol prices in June, allowing the State run oil companies to incease the fuel pirce based on the international crude oil.

On November 9 petrol prices were reaised by Rs 0.32 per litre to Rs 52.91 a litre in Delhi.

Again on 14 Dec.2010 petrol prices were hiked by about Rs 2.96 a litre.

In all IOC, BPCL and HPCL have revised rates four times since June 26 when petrol price was deregulated, while crude oil has jumped from USD 73-74 per barrel at that time to more than USD 100 a barrel now."

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