Saturday, January 19, 2013

Diesel price decontrolled

Looks like the government is trying to catch up on reforms
The recent diesel price hikes are a welcome move from a fiscal deficit point of view - though it will have far reaching effect in products and the way consumers use them in India

Lets look at how some of the things will change

Diesel cars and a changed environment. The price change will suddenly make diesel cars less attractive and it will be back to the regular petrol cars again. Companies had suddenly shifted to taking out diesel variants will need to rethink their strategy again

Price of backup power will shoot up. Today in the scarce power supply environment all societies were surviving on genesets. The price per kwh was 8-9 rs in gurgaon... now expected to go up to 11-13 range.
This will also increase Costs for companies and hospitals .. ensuring an increase in inflation

Most of the supplies around the country is through diesel trucks and you can expect a sudden jump in the cost of food items and goods.

It's going to be an interesting journey..

Lots of pulls and pushes..

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