Wednesday, June 04, 2008

Why fuel price hike ?

I am not sure if government did the right thing by increasing the fuel price. It is going to affect middle class and poor families the most. Since petrol is required from vehicles ranging from Scooters to Cars and Autos to Bus, this will result in higher allocation of family budget to this category. To add to the fire, the prices of Domestic gas has been increased by a whooping Rs.50 .

It's not possible to differentiate pricing of petroleum products based on income groups. But government can think in terms of recovery the deficit in form of other Taxes. Why can't government impose a Oil Deficit Recovery Tax on purchase of Luxury Cars and also on Middle segment cars so that the rich pays more and deficit can be reduced. The government can also think in terms of imposing a Oil deficit recovery tax on Corporate profits.

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