Are duties on fuel good method to redistribute wealth?
In Sri Ganganagar town of Rajasthan, the retail price of petrol has reached in three digits for the first time in Indian markets. This is culmination of a series of price hikes over past one year. Over 25% rise in domestic retail fuel price has happened when the average global crude prices have been much lower. Even on yoy basis, the brent crude prices are almost unchanged presently; and INR is stronger by over 5% as compared to USD. The consistent rise in transportation fuel, when the consumers were deep in distress, economy was struggling and crude prices were falling sharply, has invited sharp criticism of the government. It is pertinent to note that all subsidies on transportation fuel were removed some years ago and presently none of the transportation fuel is subsidized. Therefore the rise in fuel prices cannot be attributed to rationalization of subsidies. Social media is also full of satirical memes about the consistently rising fuel prices. In this context, it is also pertinen...