The past year has seen several fuel hikes in India because of the deregulation of fuel prices, especially of petrol. This has brought about unprecedented fuel prices in the country. As people try to cope with food inflation and burgeoning expenses, the recent hike should obviously make us think as to where we are headed.
Fuel prices have traditionally been subsidized in India and diesel and LPG continue to be subsidized by the government. The reasoning behind this is that diesel is used to transport food and other essential products and LPG is the common persons cooking option. So any increase in this would bring about mass protest and unrest in the country. By increasing petrol prices, the government hopes it will not be faced by violent protest.
UPA II has been disappointing by all standards. A silent Prime Minister, quarrelling ministers, lack of a defined leadership, corruption charges, Lokpal agitation, and a haphazard running of affairs has brought down public confidence to an all time low.
The oil companies have been hasty to increase prices whenever there has been a slight change in international crude prices but have not shown the same eagerness to reduce prices when prices have fallen in the international market. In the name of subsidy, rich SUV owners and profit oriented businesses have grown and bled the very meaning of subsidy. Car companies have joined the trend by manufacturing diesel cars to fit the price schedules prevalent. Every car company worth their name now manufactures diesel car units, many of them made specifically for the Indian market.
But such a skewed system of pricing will only lead to a skewed diesel based economy. What the government could think of could be de-regulating diesel prices for domestic consumers and profit oriented organizations. There is a plan in the pipeline to introducing a new tax for new diesel vehicle purchase. But this will not solve the problem. When other countries have a much more equal pricing with regard to fuel we have these anomalies which divide fuel and play fuel politics.
Who does the lower price in diesel benefit? The actual benefit sadly is not for the ordinary in the country but for those who thrive out of the ordinary. One would expect the government to bring about cleaner energy options and subsidize such options so that they benefit the ordinary people by giving them a cleaner, cheaper fuel and also a cleaner environment to stay in.
Such fuel politics will eventually lead to fuel protests. The Kerala High Court passed an interesting observation by saying that people should protest fuel hikes by the government. The lack of transparency by the government when it comes to openly discussing the fuel policy will bring about an anti-government, transparent drive for making natural resources more affordable for the common person in the country.