Diesel price hike makes the news, but petrol is what aam admi uses
NEW DELHI: Contrary to popular perception, increase in prices of petrol may be more damaging to the man on the street than in diesel prices, which are known to have direct and cascading impact household budgets.
A recent all-India study by the petroleum ministry’s technical wing, PPAC, found that the bulk of the demand for petrol in India is from two-wheelers, which are the preferred mode for transport for the majority of the population.
There are an estimated 0.76 billion two-wheelers on Indian roads, for a population of about 1.2 billion. Any increase in petrol price, therefore, directly impacts more than half the population.
Unlike diesel, petrol currently stands completely de-controlled and its revisions are carried out every fortnight depending upon global oil price movement.
Notwithstanding the downward revision of `1.63 per litre early this month, petrol prices in India have witnessed some of the steepest hikes, including nearly `3 a litre at one go. The cumulative hike during June to September this year was `12 a litre, before reductions in October and November.
As per PPAC’s findings, sectoral demand of petrol shows that 61.4% of petrol is sold to twowheelers across retail outlets.
Cars, which in comparison are considered an item of luxury, account for just 34.3% of the demand. The share of three-wheelers in retail sales of petrol is estimated at 2.4%, while utility vehicles and SUVs contribute 1.5% of demand.
As any sharp increase in diesel prices has a direct cascading impact on the prices of food and other essential commodities besides having wide political implications, the government has decided to increase diesel prices in small doses. Currently, diesel prices are increased by 50 paise every month (excluding local taxes).