Will deregulation of diesel prices push up SME production costs? | SupportBiz

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Will deregulation of diesel prices push up SME production costs?

 
Industry experts miffed with the deregulation suggestion.

The Economic Advisory Council to the Prime Minister of India’s (PMEAC) recommendation to deregulate the prices of diesel has drawn flak from industry experts, 

M Rafeeque Ahmed, president of the Federation of Indian Exporters Organisation (FIEO), stated that this measure might add to the production costs of the MSMEs in the country, bringing down exports.

Ahmed stated that the recommendation for deregulation is ill-timed, as there are chances of crude prices being volatile in the near future, considering the political uncertainty in the Middle East, reports SME Times.

"If prices are deregulated in such a scenario, it will push inflation and would add substantially to the cost burden of the industry, looking at increasing consumption of diesel by manufacturing units with the power situation deteriorating day by day," stated Ahmed.

Ahmed also stated that deregulating diesel rates at this stage ‘would only be adding to the woes of the MSME sector’ and that ‘this may quite be the proverbial last straw’.