Swaminathan S. Anklesaria Aiyer (henceforth SSSA for brevity's sake) believes that India "need to check the demand for oil by letting price rise. The refusal to do so is keeping demand artificially high. The subsidy for oil is also a subsidy for street pollution and congestion, and reduces the incentive to switch from private to public transport."
He further informs us that the petroleum ministry wants to raise the price of petrol by Rupees 10/litre and diesel by Rs 5/litre ( Subsequently the Govt. hiked petrol by Rs 5, diesel by Rs 3 and Cooking gas by Rs 50) to recover 50% of the under-recoveries.
Business Standard's Weekend supplement on Saturday 14 June 2008 informs us that petrol prices in Delhi is 50.56 (mind you this is because the National Capital is always treated with kid gloves) , Karachi is 42.38 Dhaka 38.74 Colombo 48.20 Kathmandu 49.97 ( all figures converted to INR).
http://www.newyorkgasprices.com/ informs that the most expensive gasoline in New York is today $4.67 a gallon. ( Converted, it is about INR 53 a litre, which is lower than the price that most ordinary Indians who live outside the NCR end up paying.)
If the price in India is higher than many other comparable parts of the world is the rest of the world also subsidising their petro products. Seems Unlikely. Please feel free to ping me and correct me if this is wrong.
If We are already paying more than a fair market price why should Indian citizens be subjected to much higher prices ?
This is not to say oil companies ought to suffer. Nor is this to an appeal to reduce duties. I just cannot see the logic in Mr. Aiyer's argument that we ought to increase prices to reduce consumption and demand which is "artificially high". Do you ?
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2 comments:
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