42% Indian households would cut discretionary spending if petrol, diesel prices rise: Survey

Prices of petrol and diesel in India witnessed a record high in 2021.

A recent survey conducted by LocalCircles has revealed that one in two Indian households believe that their earnings and savings will reduce in 2022.

Prices of petrol and diesel in India witnessed a record high in 2021 hovering between Rs 100 and Rs 110 per litre in most cities for petrol and for diesel between Rs 90 and Rs 100. The Union government’s announcement to reduce excise duty on petrol and diesel came as a breather as many states reduced the value-added tax (VAT) shortly after.

However, given the current situation in Ukraine following the Russian invasion, the prices are likely to increase again and adversely affect how much essentials and other goods will cost and how people draw up their personal finance.

Also read: India monitoring energy market, will release crude from strategic reserves if needed

LocalCircles, via its latest survey, attempted to understand how much of a price increase can households absorb given the rise in crude prices due to the Ukraine-Russia conflict. The survey received over 27,000 responses from citizens located in over 361 districts of the country. Sixty-six percent of the respondents were men while 34 percent of the respondents were women.

One in two households believed their earnings will dip in 2022 and 35 percent said say they will stay the same and four percent saw it rising.

When asked about savings, one in two households believed their savings will dip in 2022 and only 11 percent of households said they believe it is set to increase. Six percent of households said it will increase by 25 percent or more. On an aggregate basis, one in two households believed their savings would dip in 2022, while only 11 percent believed it would increase.

As many as 42 percent of the Indian households surveyed said that they cannot tolerate another increase in petrol and diesel prices. Of these, 24 percent of households have already cut their discretionary spending and are on the edge. Only 22 percent of the households said they “can tolerate any increase in the short term”, nine percent said “up to 20 percent” and seven percent said “up to 10 percent” and 16 percent said “up to 5 percent”.

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