Costlier fuel raises fright rates, leaves small transporters facing a cash crunch

The price of petrol has made a new record of Rs. 104.13 per liter in almost all of the states in our country. Diesel is also making a great competition with the price of petrol at Rs. 94.60 per liter. The rise in the price of petrol has increased the freight rates of transport. 

The increasing freight rates of the transport had caused inflation. In the last three months, the freight price of the transport has been increasing at great pace which has caused the main problem for the people who have to export or import their products. It is because of the rise in the price of petrol and diesel. Some of the small players in the market are struggling very much. 

Most oil marketing companies have increased the price of petrol by Rs. 15 per liter and diesel by Rs. 13 per liter. In the ending days of the month, July the price of petrol has touched the sky. It happened during the pandemic situation. 

The government is also permitted to maintain the same piece because they are getting high revenue. Almost every section of the society is affected by the increasing price of petrol, whereas others are happy because they are earning profit from this increment. 

What does the Transport Corporation of India feel about this?

People who have vehicles and freight sectors and the people who use diesel to work with the generator are affected more than other people. It is researched by the managing director of the Transport Corporation of India, Mr. Vineet Agarwal. Only the logistic sectors are not affected by the increasing price of petrol. 

It is because they don’t use petrol in higher quantities. Mr. Vineet Agarwal has one more post as the president of industry body Assocham. He also studied that the transporters were only able to pass through this situation because when the price of the petrol increased, they had also raised the cost of their tickets and freight rates according to the price of the petrol. 

Truck drivers have also been able to get out of this problem by simply increasing truck rental rates from August. In July, we had seen a rapid increase in the rental rates of the truck by 6-8 percent. If they have any crucial route, then the price is increased by 0.75-4 percent in August. 

It was researched by the Indian Foundation Of Transportation Research and Training. The most affected people are those who are traveling by bus and trucks. They have to pay high rent for a small distance trip also. Due to this increment in the rent of the truck, there must be an increment in all the goods as the truck is mostly used to transfer the goods from one place to another. 

The economy of India is having an inflationary impact on the rising price of petrol and diesel. The study made by Assocham states that the logistic players are allowed by the government to claim the petrol on credits. 

Goods and service tax (GST) does not contain the tax on petrol, diesel, and natural gas. It allows the businessman to claim the credit on the tax they should pay on the price of the fuels. They are also entitled not to pay the tax which is invaded in the goods and services.  

The higher freight costs may affect the demand for the end products and the demand for the products of MSMEs. This point is found by the chairman of the energy and engineering company in India, Sameer Gupta. 

What are the experts’ opinions?

The experts say that the fuel prices must be stable after the next few years. It can only happen when the taxes and crude oil prices are reduced. Crude oil prices are about $64.4 per barrel and go up at the beginning of 2021 to about $51. 

Shaktikanta Das, the RBI governor, has also appealed to reduce the taxes on petrol and diesel, to reduce the upward pressure of price. But there is no reply to the RBI governor’s appeal. 

The government has increased the taxes on petrol by Rs.13 per liter and taxes on diesel by R. 16 per liter in 2021. Firstly this rule applied only to Delhi, and now many of the states are also raising the taxes on fuel. It is because the government has to increase the revenue during the pandemic situation.  


We hope that the above paragraph will help you with the graph of the price of petrol. The prices of petrol are increasing in huge amounts which are affecting every person except the logistic people. The transporters are also not having adverse effects because when the cost of petrol rises the freight rates of transport also increases. The government does this to boost up their revenue during the covid-19.  


Leave a Reply

Your email address will not be published.