Our economy seems to be at the receiving end of the wrath of some sinister force. It seems inflation in the prices of essential commodities was not evil enough; therefore we now have to deal with the problem of skyrocketing crude prices.
It is estimated that the petrol prices will further increase to $150-$170 per barrel. It is evil at its worst. Petrol and diesel are the main sources of energy in most nations. It is the force which turns the wheels of numerous vehicles around the world, which runs millions of machines in countless factories, production plants etc. To summarize – oil is the elixir of life in the modern world. The increase in oil prices is going to hurt everyone everywhere. No mortal whether rich or poor, old or young, inhabiting a first world or third world country will escape the consequence of this unsolicited rise in prices.
This could hamper the growth and development of not just the Indian economy but also that of the world. In fact, this would also adversely affect various industries ranging from aviation, fertilizers, pharmaceuticals, tires, paints, automobiles etc. If the oil prices continue to rise as predicted then our economy will be grasping for breath. It would become a challenge to maintain the growth rate at or above the present 8 per cent. It could even lead to further inflation which would make life in a modern industrialized world a lot more bitter.
Even individuals would have holes in their pockets as they would have to shell out more and more of their hard earned money to quench the thirst of their cars. While CNG seems to be a viable option for many; it comes with problems galore. To install a CNG kit one has to dish out an amount ranging from Rs. 35,000 to 40,000.Getting a CNG vehicle registered is a monstrous task, which takes about two months and a lot of running around in circles, pushing your files through the many so called procedures and some times it even requires people to motivate the officials to work by means that should not be openly acknowledged. That is not all, due to there being a deficit in the number of dedicated CNG filling stations – a person might end up spending half his life in the unending queues for the coveted gas.
If crude prices continue to go up the ceiling then the industrial sector will have to bank on energy sources like hydro energy, energy from biofuels, and nuclear energy for generation of power and to keep their machines from halting.
The aviation energy would have to brave the worst blow. Low cost carriers like spice jet, Go Air, Indigo, Air Deccan would all undergo huge losses in such a scenario. Many low cost carriers might even face extinction due to unrecoverable losses. The cost of air travel will increase and many of those who had upgraded from trains to low cost carriers will again see themselves traveling in trains.
The increase in oil price seems to be inevitable. The Indian government which was till now subsidizing oil prices also had to succumb to the increasing oil rates. If the rates will further escalate the burden will again be passed on to the consumer. It seems the days of long drives, plane journeys during holidays will become a thing of the past for many Indian consumers. The impact of the increase will be felt by one and all, in every corner of the world.