Indian govt. has been pretty consistent in keeping the tone of its approach towards public same for both years 2010 & 2011. It ended calendar year 2010 with petrol rise of ~2.57 and followed it up with similar rise of ~2.54 .Whether valid justified or necessary are the debates which will continue for a long period to come and parties will keep on making hue and cry about the same.
But the point which I am trying to make is a bit weird and is bound to raise eye brows.Let us think for few moments if fuel prices are not hiked and govt. keeps on giving subsidy by absorbing the losses of the PSUs, what can happen.
1) Govt. pays those losses through tax payers money or giving PSUs credit letters
2) Pvt. players are driven out of business as they cannot sustain such losses and don’t get subsidy too. Loss of employment for those in the sector.
3) The user is unaware of real value of the commodity.
All three of these have been utilized by various elements in various forms for their personal interests.
This system really needed a revamp which is duly justified as if the fuel prices are kept free floating then the tangible benefits which I are as follows :
1) User is aware of the price and hence he can think for optimizing and prioritizing his usage.
2) Differential in price is directly collected from the user and hence tax payers actual money with govt. can be utilized for some genuine planned purpose.
3) It will force parents and seniors in society to enforce a culture of responsibility among youth who drive automobiles at their will and at somebody else cost.
The all above will directly or indirectly promote public transport usage, which has been a real lag in Indian due to several reasons. This will again put pressure back on the Govt. to improve infrastructure/transport system to cope up with demand. Time required & corruption possibilites are other issues to be tackeled here but we will have a solution.
I understand this is a bit rave idea but if you think for some time they really start making sense, especially last point.
Yes, no doubt there are other ways to control and moderate the fuel price as it will ultimately help in inflation rate to climb. Current breakage of fuel price is
If the price of petrol stands at Rs 58.90, the break up of cost as calculated by the Indian Government is as follows:
• Basic Price: Rs 28.93
• Education Tax: Rs 0.43
• Dealer commission: Rs 1.05
• Excise duty: Rs 14.35
• VAT: Rs 5.5
• Petrol Custom: Rs 1.54
• Crude Oil Custom duty: Rs 1.1
• Transportation Charge: Rs 6.00
• Total price: Rs 58.90
Ref :: http://blog.mapsofindia.com/2011/01/18/yet-another-petrol-price-hike-for-india/
Certainly a better way needs to be found but running away or hiding is not what we are looking for.
1 comment:
All that is fine. But here is the part I don't get. In USA, petrol retails at approximately 3 dollars per gallon. Therefore -
3$/3.78 liters (1 US gallon = 3.78 l)
INR 145/3.78 l (1$ = INR 45 appx)
This works out to be INR 38.36/l and we pay appx INR 66/l
All this when both India and USA buy crude oil at the same price.
Agreed that petrol subsidizes a lot of other stuff, but does that justify the cost difference of INR 28/l ?
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