Car users, especially those in affluent class, should be ready to shell out more for petrol and diesel if the crude oil prices increase further, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said.
"I have no hesitation in saying that there is no magic bullet with the government. If import prices (of oil) increase we cannot insulate the domestic consumer indefinitely," Ahluwalia said in an interview with CNN-IBN.
The government, battling inflation, raised prices of petrol and diesel by Rs five and Rs three per litre, respectively, on June 5 to help state-owned oil marketing companies offset part of their under-recoveries.
Ahluwalia said the recent increase was a signal that if energy prices rise further, people have to get ready to pay more. "There is a case for insulating the poor. A much weaker case for insulating the general consumer...Very little case for insulating the rich. So the fact, is, yes, if oil prices keep on rising the government will have to do something," he said.
However, Ahluwalia said the government did not want to "shock" the general consumers too much.
As a move to discourage fuel-guzzling private vehicles, the government on Friday slapped additional specific excise duty of Rs 15,000 per unit on large cars, multi-utility vehicles and sports utilitity vehicles with engines between 1500 cc and 1999 cc capacity.
For cars and vehicles with engines capacity of 2000 cc and above, the duty was raised by Rs 20,000 a piece.
Admitting that the "sea" of Indian economy "has become a little choppy", Ahluwalia insisted it has not lost direction. "I think the ship is steering pretty much in the direction it should," he said.