The price of oil is likely to increase, which will likely have an impact on consumers directly. For example, higher fuel
Key Highlights :
As domestic oil prices are pushing upward following global trends, concerns are rising over its possible impact on consumer prices, which have been barely contained for the past few months. The government's possible scrapping of the fuel tax cut is also adding to concerns.
The fuel tax cut, which was introduced in 2017, reduced the price of petrol by Rs. 2.50 per litre and diesel by Rs. 1.50 per litre. The government had announced in November that it would be scrapping the fuel tax cut, citing the rising prices of oil as a reason.
The scrapping of the fuel tax cut could lead to a rise in consumer prices, as it would decrease the purchasing power of consumers. The government has been trying to contain the increase in consumer prices by introducing a number of measures, including the fuel tax cut and the implementation of the goods and services tax.
However, the measures may not be enough to contain the increase in consumer prices, as the global market for oil is becoming more volatile. The rise in oil prices is also due to the increasing demand from China and other developing countries.
The government may have to take additional measures to contain the increase in consumer prices, such as increasing the minimum wage or introducing subsidies for consumer goods.
