From the Viewsroom

Why high petrol prices hurt

Tina Edwin | Updated on January 10, 2018

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Informal sector workers, relying on two wheelers, feel the pinch

Newly inducted tourism minister, Alphons Kannanthanam, is not entirely correct when he says those who can afford to pay for a car or a bike can pay for petrol as well. He may be right about cars, but not about two-wheelers — be it a moped, a motorcycle or a scooter. A two-wheeler is not necessarily just about aspirations for those with very limited income, it is increasingly about livelihood. That’s why two-wheeler sales continue to grow even when sales of cars and other four-wheeled vehicles hit a hurdle. Two-wheelers also provide mobility where there is no dependable public transport.

A two-wheeler is increasingly becoming a necessity for many in the informal sector, especially those who provide door-to-door or home services. It is essential for those who work as delivery men for courier and e-commerce companies. Or, for after-sales service technicians who need to criss-cross across urban and rural India, fixing problems customers face with consumer goods. While those employed by companies would get reimbursement for petrol expenses, those in the informal sector would have to treat it as an out-of-pocket expense. These people have to bear this expense to earn an income, as any other form of transportation, arguably other than a bicycle, would be more expensive.

Any change in taxes on petrol would immediately benefit or affect this class the most. Collectively, two-wheelers account for about 60 per cent of the petrol consumed in India, according to a study commissioned by the Petroleum Planning and Analysis Cell in the ministry of petroleum and natural gas in 2013. Cars and utility vehicles account for just about 36 per cent of petrol consumption. The Government should consider the interest of the owners of two-wheelers when it makes a decision on taxation on petrol — and recognise that two-wheeler owners form the crucial backbone of the economy.

Senior Deputy Editor

Published on September 21, 2017

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