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by unmole 1688 days ago
The price elasticity of fuels is famously low. So, increasing the price of fuel by 10% will not lead to a 10% reduction in consumption.

The government knew this and doesn't claim that these are meant to reduce fuel consumption. Besides, it's not like much of India has decent public transport.

The high taxes are not meant to reduce consumption but shore up revenue. The Indian government slashed corporate tax rates last year. And revenues from GST were lower than expected because of the shutdowns imposed to contain the pandemic.

Here are two very well written articles by Vivek Kaul which explain the high prices in great detail:

https://vivekkaul.com/2021/06/17/petrol-and-diesel-prices-ar...

https://vivekkaul.com/2021/07/14/whats-the-real-story-behind...

1 comments

Public transport costs are increasing as well.

I used to pay 10rs for a shared auto per 5km, now it's gone to 15/20.

Public transport aka buses are still cheap but number of busses and their frequency is low

Increase in fuel prices increases the cost of all transport. This causes inflation all across the board
Off topic, but are you the guy whose Reddit username is also unmole?