The increase of private vehicles has become exponentially popular among all social groups to such an extent that was previously impossible. Under these circumstances, some further state their stance that increasing the taxation on petrol and diesel fuel will discourage the use of individual automobiles. However, evidence has proven otherwise.
First and foremost, it is worth considering that elevating the tariff poses potential risks in terms of financial burden and social stability. To be specific, suburban residents encounter the strain that insufficient public transportation is incapable to meet the requirement of rural people’s routine on a daily basis. Facing the higher tax on fuel energy, these people are more likely to be impossible to afford that, decreasing the satisfactory level. Furthermore, it has a significant impact on economic equality in society, broadening the wealth disparity. Conclusively, rather than incentivizing a shift to public transit, it could instead push financially vulnerable populations further into hardship, fostering resentment toward the government.
Second of all, with all essential aspects advised, it should be noticeable that surging tax can have harm towards the logistic business and tourist industry. As the majority domestic logistics are dependent/rely on the fuel resource, cost increasing will definitely strike on the operation. Subsequently, the unemployment rate rockets due to the local companies losing their competitive advantage. In addition, the indigenous tourism industry is subject to the influences of fiscal policy. Given this scenario, people have to phase out traveling with private cars and turn to the public transportation system. As aforementioned, the inconvenient transportation restricts tourists from exploring more remote areas, where local people mostly earn a livelihood from recreational activities.
In the light of these facts, the rising taxation on fuel energy can wreak havoc on economic growth and social inequality. As long as the demand of privately transporting is popularized on a proper navigation, these detrimental effects are likely to be mitigated.