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Diesel hike may flare up food & beverage raw material prices by 20-30%
Tuesday, September 25, 2012 08:00 IST
Abhitash Singh, Mumbai

The food & beverage industry, which has been reeling under multiple pressures – inflation, drought, and hike in electricity and water charges – has received yet another jolt in the recent increase of Rs 5 for a litre of diesel.

Once again a cascading effect is expected and the industry fears that prices of all raw materials including vegetables and fruits may go up by 20 to 30 per cent in the coming days.



M A Tejani, president, All India Food Processors' Association (AIFPA), and MD. Gits Foods, said, “Diesel hike will have a cascading effect on all essential commodities. Increase in diesel prices will give rise to transportation cost. Further, it will lead to hike in DA of drivers, wear and tear of vehicles, and so on. Our government is messy and not disciplined like China. We as a tax payer have to bear the burden of government’s wrongdoings.”

Echoing his view, Mohan Gurnani, president, Federation of Associations of Maharashtra (FAM), said, “The diesel hike is going to have a cascading impact on all essential commodities. The government is killing the common man by slowly poisoning them. It is really difficult for the poor to survive in this situation.”

Explaining the ripple effect of the price rise, Narendra Patil, a Nationalist Congress Party (NCP) member of the legislative council (MLC) and a leader of the Mathadi workers' union in Mumbai, said, “It is a-given that every transporter will increase freight charges.”

He pointed out, “The prices of vegetables and other agricultural produce will fluctuate according to the demand-supply factors. After the diesel price hike, the prices of all essential commodities started increasing by Rs 5-10 per kg and will see a further increase of 20 to 30 per cent in the next few days.”

He added, “Big retailers like Reliance, More, Big Bazaar and HyperCity can bear the burden of diesel hike because they have the money, but small traders find it difficult to survive.”

Kirti Rana, director, spices market, APMC, said, “Due to the diesel hike, there will not only be an increase in the prices of essential commodities, but also bus and other transportation services. The government has hiked diesel prices by Rs 5, but for branded variants (of the fuel), customers will now have to pay Rs 19 more.”

“Earlier, I used to fill 60 litre turbo diesel at Rs 3,800 and now it cost me Rs 5,100. They have directly increased the rates by Rs 1,300. How will the common man survive this burden,” asked Rana.

Sanjay Yadav, a vegetable and fruit vendor at Vashi, Mumbai, observed, “The prices of vegetables and fruit will increase even further after diesel hike. We have no option because vegetables and other commodities go through multiple phases of transportation before they are delivered to the end consumer.”



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