Fluctuating fuel prices are slow poison for SMEs

VAIBHAV PARWAT

Aurangabad, July 9:

After petrol, diesel prices will soon touch Rs 100 mark. Diesel is at present being sold at Rs 98.43 per liter in the city. On July 9 last year, the price of diesel was Rs 69.08. The rising fuel prices have left the industrialists a worried lot who said that the rising fuel prices are jacking up raw material prices at a time when they are already battered by the lockdown.

Petrol and diesel prices have been rising for the past two months. The hike started on May 2. From March 1 to May 3, petrol and diesel prices were stable. On May 4, the price of diesel in the city was Rs 88.95 per litre. This is followed by constant hikes till today. President of Marathwada Association of Small Scale Industries and Agriculture (MASSIA) Narayan Pawar said "With a large portion of raw materials arriving from such cities as Delhi, Mumbai, Punjab, Ahmedabad and Karnataka transportation cost has gone up with the rise in fuel prices. And we have no option but to increase prices of the finished goods to tide over the crisis. Daily fluctuating fuel prices are a slow poison for small and medium industries. Industrialists are now paying up to Rs 20-000 to Rs 25,000 to suppliers for transportation of raw materials from Mumbai to Aurangabad as against Rs 4,000- Rs 7,000 a year ago due to frequent hike, adding that the whole industrial sector has been hit hard due to the back-to-back hikes in raw material and fuel prices.

Impact on several sectors

Diesel crossed the Rs 98 mark in July. This is an increase of Rs 28.52 over the last one year. If the hike continues, diesel prices in the city are likely to cross Rs 100. However, this might leave a severe impact on industrialists, travel sector, transportation professionals and freighters.

Units have reduced orders

We are forced to shell out a lot due to fuel price hikes. There has been a 40 to 50 per cent hike in transportation costs compared to last year due to the rise in fuel prices, and it’s taking a toll on industrial units. To manage the situation, many units reduced orders by 40-50 per cent. The industry has been hit with multiple issues like rise in raw material cost and component-supply constraints. Besides, there is a domestic shortage of products. Logistics accounts for around three to five per cent of the price of goods. To reduce the burden, we will be forced to increase prices of final products, said member of the tiny industry association Mihir Kulkarni.