In a bold move that has come from Oil Marketing Companies and not exactly from the govt , the petrol prices have been raised by about 10% . It has come not without the govt’s tacit consent and has the govt has to be to ready for the criticism directed against them.
There is some dirty play is the natural conclusion that comes to mind when govt’s vice like grip on all aspects of petroleum is considered. In what way does the govt or anybody else looks at it not as just another commodity.
The petroleum consumption is most flexible of all commodities commonly consumed. It has a great elasticity of demand which can vary according to the price in market and is never a dying need. Where it is an important input and the public’s welfare is attached , it is as a fuel for the trucks but its impact on this sector happens to be more when shortages are there . When the pricing is free the market ensures that there are no shortages.
Further taxing it like no other commodity and then also impressing on people that its an item which has to be supplied to people only with subsidies , is an exercise mired in falsehood. The taxes and duties help the thieves and short deliverers , and the differential in prices is to prompt adulterators for benefiting out it. This can only be there because some powerful lobbies have an influence on govt and its people.
Then there are questions of long term contracts and quality of crude . Then there are fluctuating currency parities . The hedging for crude price, for freight and for exchange rate as also to take into account political equations , makes the whole thing very lucrative for taking benefits without anybody coming to know the whole game. So, naturally , in garb of taking care of public interest , the money can be made and stashed abroad far more easily.
The only policy that can counter ill practices is to let all aspects of it be freed from any kind of govt control and left open to traders, producers and marketers . This itself will ensure that petroleum products are sold far more cheap then at present and any price movement necessitated by the changing demand and supply equation would be moderate and well absorbed. An Indian household can well do without petrol but not without milk, cereals and gold for the daughter’s wedding.
We had highest GDP in Mughal era but did not have need for a drop of crude oil . We can develop our economy in a way that does not rests too precariously on imported petroleum. Thinkers should pay attention to finding ways and means to reduce dependence on oil as a major item of input for every economic activity. This way only can we make our nation of 1200 million people happier, without living in fear of oil not being available . It is not going to be available sooner or later , so why not get ready for it sooner rather than later.
The cost component that has relation to crude price and currency rates is just not more than 30% of the price charged to the consumer. Is it not a fraud on people to find it necessary to jump the prices so vehemently .
We Indians should know it clearly that the crude oil import and selling a piece of India are directly proportional. How long then we have liberty to let it go on. People are made to believe that the FDI (foreign direct investment) and FII ( financial institutional investors) inflows are good for nation to balance the currency need generated out of crude import . Please understand this does not come without India and Indians committing rather mortgaging future of coming generations. Greek made merry on borrowed money and now they have a constant pain in neck , their own and of others.
I do have doubt about our democracy remaining safe in such hands which have no other work than to be busy matters of safeguarding ill-gotten wealth . The other occupation is to try and keep the attention of people from matters that are really important. The public does not understand the complexities of today’s economic and political environment and plays right in to wrong hands.