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Fuel price and household budget

With spiralling fuel prices, the costs of products and services are likely to turn unaffordable and tough times seem imminent, reports Arnav Pandya.

business Updated: Jun 05, 2008 20:32 IST

One of the prime worries for a householder is ensuring that the household budget remains within control. But with spiralling fuel prices, the costs of products and services are likely to turn unaffordable and tough times seem imminent. However, some of these costs can be reduced through meticulous handling of situations. Here are some tricks to reduce your cost burden.

Travel cost
One of the major effects of the fuel price rise will be on transport or travel cost. If one owns a car and uses it often, the cost impact will be felt directly. However, even those who travel by public transport will feel the pinch if the tariff is hiked due to fuel price rise.

There are two ways of looking at the entire issue. Where travel is unavoidable, then the person can either absorb the hike or reduce the use of the vehicle on some days to bring down the cost to previous levels. If the vehicle is used for personal travel then unnecessary travel can be eliminated to cut cost.

The other option is to use public transport where ever possible to cut cost.

Cooking expense
Food is one area where impact of fuel price rise cannot be avoided. There has been a steep rise of Rs 50 in the gas prices and this is bound to hit every home.

While not cooking is not an option, the family can ensure that there is little wastage of gas. Now even eating out will be hard on the pocket as most restaurants and eating houses will hike their rates and this can hit the individual hard, making a large dent in the household budget. This will call for higher allocation to this section of the budget.

Other usage
Several other expenses will also witness a rise like freight and cost of various products. There will also be a trickle-down impact on several products that have to travel long distances to reach the end consumer.

The increase in diesel prices will be passed on through a rise in the cost of various produces. There is a way in which people can ensure that they still consume right about what they were consuming earlier by substituting their existing items with smaller brands.

This will ensure that their cost is lower because smaller brands or unbranded products have a lower cost and hence this can be tackled.

Budget change
An overall change will be required in the way the household budget is used up.

One has to redraw the budget keeping the new rates in mind so that there is change in the manner in which various items are consumed.

The other thing required is constant monitoring so that you know when to put a stop to various expenses and how future use is to be monitored. Also, do ensure that there is some extra amount put in the budget so that there is not much trouble in maintenance of the household budget.