Effect of hike in fuel price for common person

Gone are the days when Rs. 7000 a month salary would be enough for middle class family of four to live on. Actually, those days were long gone 8 years back. Government can do many ways around taxing businesses or people, and looking once at budget all may feel satisfied, kind of. But even though economy is going up, India is a poor country, as most country’s population not making enough to even feed themselves 2 time a day.


There are rich people, lots and lots no doubt. And middle class people are raising their standard by earning more, but in compare to people with best to decent life, majority of people in India are poor, or just hardly manages to be able to give the basic needs of their family, and some are not able to do that at all. I remember that construction labor workers back in late 1990s were making Rs. 80 per day of hard work. They would start work by 7am till 12pm, will take break of hour or two, than will work till 6pm. That makes a total of about Rs 2000 for a month, not all the days they able to find work. They did not have homes, no basic needs of life, and they would eat Roti and Onion. As onion on those days was cheapest of all, around Rs. 3 per kg. Today, they earn Rs. 120 to Rs. 150 per day of work. It’s not easy work they do. Although, from Rs. 80 to average Rs. 130 sounds good of a progress, truth is, it’s not. Onion which used to cost Rs. 3 per kg, now costs average Rs. 18 to Rs. 22 per kg. So, cost of living has gone up, but income has not gone up to match up with raising costs of food.

So, why does these prices go up, when mostly farmers and exporters are doing all same as been for years? In, any cost hike, one common reason among all items, is “Fuel”. If fuel price goes up, price for everything will go up. Simple way to explain is such as, 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 its 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 keep up 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 workers, who are not even able to manage 1 time of decent food?

In USA, back in 2000 to 2002, cost of fuel was $0.59 to $1.19 by end of year 2002. Currently, price of fuel is $2.60 average and often goes high as $3.40, in some states even $4.00. Due to this, cost of every single thing is gone up. Burger of McDonald, which use to be big, size of it now somewhat shrunk. This is because they want to keep price same, but same time quantity is cut. So, in this way or other way due to the raising price, all cost have gone up. This was main reason for common men going broke and raise in number of poor people in USA, as because of war with Iraq, fuel export was complicated and prices of fuel had gone up than.

It’s no different in India. Overall number may show up to 6% raise in country’s economic growth, but government must pay attention to 30 crore plus of India’s common people whose living cost goes up to 60% higher in compare to 10% raise in their income.

India has 2nd largest population in World, everyone knows that. Government has a 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 it’s also not impossible.

  1. This budget is eyewash and those who feel that Govt has done a great job in the field of personal taxes forget that all those savings will go in to the price rise which is going to take place on account of fuel price rise. All these years Government has NOT DONE anything to trap professionals like Doctors, Auditors, Lawyers, Consultants etc who earn in lacs but there is no check on their income and many of them file NIL returns!!!!!!!!!!!!

  2. I don’t think it would be fair or will work, making people with more income pay more taxes. Yeah, it seems fair to think, that if they earn more, they should pay more. Reason is, Doctors, Lawyers all work hard to get their degree, cost of education is also not any cheap, so they would obviously want to make their work and investment worth it. Obama Administration had tried this idea, for example, if someone earns more than $2,000,00 per year, they should pay more tax as they earning lot. But it failed, reason? Cost of Education is so much that, once Doctors get their degree, each of them have debt of up to $1,50,000! average. Which is lot, as average family income in USA is $50,000 a year for common working family, and also all members of family work. There was a doctor whose interview was shown, he had 3 young kids, so wife was not working, he was alone member of family that worked and provided. He had 3 bed room house, which he bought with loan. His Yearly income was just couple of thousand over $2,000,00 which will put him in category that he will have to pay almost 50% double of his tax, if that law had passed. Cost of raising 3 Children, and cost of living is not cheap anywhere anymore, and being 1 earning member in family of 4, it didn’t seem reasonable. So, law failed to pass. Any Big businesses, who make lots of money in good time, also loses lots of money in down economy. Good example of it is Anil Ambani. In 2008, His company earned 24 Billion of profit, where in 2009, in just 9 months due to bad economy, lost 30 Billion. So, making richer pay more tax is not the idea that can always work, yes it would be nice if they can do charity, and they also work hard to be where they are and sure have right to live life they dreamed of. Best way is that don’t let anyone escape out of paying tax money, no black money or under table income. Just make sure all pays their share of tax from their earning, and it will surely make change for good.

  3. Hi, ur blog is really interesting & wonderful, while reading it I truly like it. Finally I have bookmarked ur blog & also shared to my friends. I think my friend might too like it hope u have a wonderful day & !!happy blogging!!

  4. how can common people survive in such a situation .

  5. good blog

  6. Yahh your article is really good. The government is trying to increase the economic growth with out considering the common people.How a common people can survive by spending half more which they spends earlier. The request to honorable prime minister and his colleagues is to just consider common people like us also. This is a request of half of the population.

  7. India Mainly

    September 28, 2012 at 6:55 am

    By Raising Costs of Fuel, indirectly invites raise in cost of almost everything which obviously puts burden on common people. Whose income does not grow enough to match with raising cost. All our government need is to clear corruption and allow better investment trust worthy environment with transparency in process, management with clear rules to attract “foreign investments” in India, which will create more opportunity for Indian Citizens. However, by allowing 51% FDI in retail is importing 51% from outside and hurting local produces. And with that raise in fuel cost – How is it beneficial to People?

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