The increase in fuel prices has a cascading effect on inflation by rising prices in several other sectors of economy on every step in production and supply chain. It affects farm food production to manufacturing industrial goods to services to prices of daily essentials.
The increase in fuel prices affects every person, however it hurts the poor the most, who have to spend a larger portion of their incomes to cover this inflation. The fuel tax is part of indirect taxes that are a form of regressive taxes, collected from excise, GST on various goods and services. Direct taxes include wealth tax, corporate tax, import tax, income tax and others collected from rich and big industrial houses. Ironically, the fall in tax collection from the rich, was made up by increasing the taxes on the poor.
Dr Soma Marla