Fuel Price Hike Stokes Fear Dent in Incomes, Savings
Rising fuel and basic commodity cost have impacted majority of consumers expecting a decrease in income and savings
Rising fuel and essential commodity costs, along with the Covid-19 epidemic, have impacted people's wallets, with a majority of consumers polled expecting a decrease in their income and savings this fiscal year, according to a survey.
Participants in the study also want the government to decrease the levy on gasoline and diesel by up to 20 per cent. For this study, participants from 382 districts provided a total of 70,500 replies.
In most regions of the country, consumers are paying more for the same list of necessities and food goods in the last three months than they did in the previous year and 2020. According to a poll done by community social media site LocalCircles, prices of products such as edible oil, detergent, and shampoo have increased by 4-20 per cent.
The 'Mood of the Consumer' survey was aimed at understanding how many more people paid to purchase vegetables in comparison to December 2020 to February 2021 or before the second wave of the pandemic as well as change in people's monthly household expenses in the last three months.
According to the survey, 65 per cent of the households said they paid 25-100 per cent higher prices this year for vegetables in comparison to December to February. Vegetable prices witnessed an increase as many vegetable mandis across the states were hit by lockdown and restrictions till May, followed by an increase in petrol and diesel prices.
As many as 79 per cent of households said their monthly grocery expenses are fetching less quantity for the same or more money they spent during December to February. In June, India's consumer price index-based retail inflation hovered above RBI's comfort level at 6.26 per cent. While the wholesale price index-based inflation stood over 12 per cent.
While 47 per cent of the consumers expect that the uncertainty related to Covid may last 6-12 months in their household budget planning. As many as 49 per cent felt their average household savings will reduce in 2021-22 in comparison to 2019-20, the survey said.
"A similar question LocalCircles asked consumers in May 2020 survey, 46 per cent of consumers were expecting their savings to decline. This percentage has increased marginally to 49 per cent of consumers now expecting their savings to decline in the financial year 2021-22 given the intensity of the second wave of Covid-19."
On fuel price hike, 76 per cent of the consumers said they want the government to reduce excise duty on petrol and diesel, with the majority of them the duty to be cut by as much as 20 per cent.
In April-May when several states observed lockdown-like restrictions, the fuel price increased 15 times. In Delhi, petrol is priced over Rs 101 while in Mumbai, the price has crossed Rs 107 a litre. Among others, states like Rajasthan now have petrol and diesel priced at Rs 112 and Rs 102 a litre, respectively.