[sustran] Fuel prices and inflation

[Rutul Joshi]

Hi all, 


I have a query - probably a naive one. 


Every time there is a fuel price hike in India, the complete hoax 
starts doing rounds on the social-networking site about 'how fuel is 
cheaper in other countries in Asia?' and 'how this rise in fuel prices 
is going to affect the economic growth'. The argument put forward by the middle-class and their friendly media is the links between the fuel 
cost and inflation leading to price-rise in the food items and the 
shrinking of the food basket of the poor people. Some other people (in 
ultra-minority) argue that it is just middle-class propaganda to shield 
themselves in the name of the poor. However, I don't know how valid or 
in-valid these arguments are. Intuitively, I am with the second group 
but I don't really have stronger basis for it. Can some of you who know 
these issues in detail, throw light on the same?

Thanks,
Rutul