HYDERABAD: The increase in diesel price by Rs 6.4 per litre over a span of six months has tightened the wallets of those plying diesel vehicles, farmers and consumers alike. The diesel price in the city, as of Friday, touched Rs 65.12, an all-time high for Hyderabad. In July, when the daily revision of fuel price was introduced diesel price stood at Rs 58.72 per litre. Since then, diesel prices have been on an upward trend.
For those in the transport sector, this means reduced profits. “The fuel rates vary city to city and change daily. I have to factor both while giving cash to the driver for expenses,” says Bhaskar K who owns three trucks transporting vegetables between states. Sometimes, his trucks go as far as Delhi. “We can’t rely on debit cards as some fuel stations will be on areas beyond network coverage.
Truck owners are also increasingly finding it difficult to offset fuel cost to their truck rent. “It’s a cutthroat business. If I hike my rent, who will hire my trucks?” Bhaskar Reddy Nakula, president of Telangana Lorry Drivers Association says truck owners are not a consolidated sector and hence lack the leverage to demand any government help.
It’s not just the transport sector, the increase in diesel prices have had a direct impact on food items. “The cost of vegetables will go up and it will have to be borne by the consumer,” said Debashish Acharya, professor, school of economics, University of Hyderabad. “But there are two conditions that need to be factored in. The situation of normal supply and that of an oversupply of vegetable produce.”
“In the southern states, there are certain vegetables that are grown more or less within the region. So if the vegetable production is high in these areas and there is an oversupply of vegetables, even if the transport cost goes up due to the fuel price the basic price at which the transporter will lift the produce from the farmer will be more or less the same. So consumers will not be affected in terms of price. But when there is no oversupply of vegetables and the fuel price goes up the price of vegetables too will go up,” said Acharya.
In the event of oversupply, the price the end consumer pays will mostly depend on the bargain struck between the transporter and the farmer. “One sees the price of certain vegetables fluctuate a lot over the year, this is one of the underlying reason,” said the professor. Even if the consumer has to shell out more, the one at the losing end of the bargain is the farmer.
“Farmers use tractors, ploughing machines and water pumps that are diesel dependant. This shoots up their operational costs. The transport costs are added on to the vegetable produce by the traders and transporters. But the operational costs of the farmer are not factored into the selling price of the vegetable,” said GV Ramanjaneyulu, executive director, Centre for Sustainable Agriculture.
“If we compare the data of the last four years on how much the diesel prices have increased and the corresponding increase in food price, we find that the food price has not increased in proportion to the rise in diesel price. The price of wheat and paddy rise annually by 3 per cent but diesel prices have gone up by 10 per cent. The cost of cultivation is increasing but the price at which the farmer sells to the trader has not increased,” he added.“Most states have taken initiatives to connect the farmer directly to the market, our studies have shown that it’s not a foolproof. The farmer does not always get the right price for his produce,” added Acharya.