How YOU can deal with the petrol price hike!
Rather than complaining about the rise in petrol prices, Aditya Prasad suggests some really simple steps to deal with it.
Perhaps the newspaper headline we dread the most is one involving petrol prices. On May 23, state run oil companies announced a hike of about Rs 7.5 on petrol prices, this being the biggest ever hike. This is one of the casualties of rupee depreciation. It is not so much the increasing crude oil prices, in fact crude oil price has come down in the recent past, what triggered the move was a constant depreciation of rupee against the dollar.
Since we are an oil importing country, a depreciating rupee burns a deep hole in pockets of oil companies. With petrol prices being deregulated, it was almost certain that the prices will be hiked sooner than later. What came as a shock though was the extent of the hike. Ironically, stock markets posted the biggest gain in 2 months on this news.
With angry protest all across the country, one may expect to see a partial rollback eventually. The petrol prices in India are amongst the highest in the world and a large component of the price is in the form of central and state government taxes. Goa state government has lead by example, where they reduced the petrol prices by Rs 11 by doing away with a large part of the state levied taxes. However, it would be imprudent to assume that all state governments will follow suit.
We all know that announcing bandhs and burning effigies of the government officials are not going to provide any long term solutions to the problem. Being angry about something is a short term reaction. The government will do what it has to, it is time we look inwards, at our own household budgets and see what best we can do to not lose sleep over rising prices of petrol.
The author is chief evangelist, Perfios.com
Image: Motorcyclists crowd a fuel station to fill up on petrol in Ahmedabad
Photographs: Amit Dave/Reuters
Budget your household expenses
People often procrastinate when it comes to taking charge of their finances. Definitely, a petrol price hike will harm you but it wouldn't harm as much as over spending on things you don't need or can do without. We are living in difficult times where incomes are rising at a slower pace than expenses. That is reason enough to keep a close tab on how we are using that hard earned money.
With an increased outflow in transportation costs, and given the same level of income, you need to obviously cut down on some other head of expense. And how would you achieve this? Only by keeping a budget. Allocate a monthly spend to different heads of expense and then track closely to know where you may be overshooting your budget. An increased allocation to transport can be nullified, for example, by a reduced spend on shopping and entertainment. You may not do this forever but you can do it temporarily to tide over the difficult situation.
Illustration: Uttam Ghosh
Image: Budgeting your home expenses can make things easier in times like these
Use public transport whenever possible
Public transportation although lacking in India, has improved quite a bit at least in the metros and Tier 1 cities. You may switch to using public transport whenever possible. The lesser you take your car out, the more you save. This is something which one must do at all times rather than just when the petrol prices go up.
Image: Public transport will slowly but surely become a necessity
Image: Try car pooling rather than driving alone to and from work
Photographs: Mansi Thapliyal/Reuters
Switch to electric or gas cars
This is a long term option and more a matter of choice, but an option nevertheless. We have limited availability in India of electric cars or cars which run on gas (which is a cheaper option than petrol), however people are now increasingly choosing these options over petrol and diesel vehicles. Not only does this reduce your running costs, it is environment friendly.
A lot of people are choosing to use bicycles over two wheelers and cars, for short distances. Walking down a distance than using your car can not only keep your financially fit but also physically fit. Also, if you are using your car, you can strive to get a better mileage by taking small steps such as not idling at traffic lights, maintaining good tyre pressure, getting your vehicle serviced on time etc.
The hike in fuel prices will continue and we might as well be prepared for it. Let us control things which are under our control rather than getting hassled about things over which we have little or no control.
Image: Ever considered switching to an electric car like Reva?