Whose fuel-price hike is it anyway?
28 May 2012
A rise in price of petrol by itself will have a negative impact on the economy and the environment unless it is followed by an immediate hike in diesel prices as well, writes Anjor Bhaskar
It is a moment for all those who have been fighting for equity and justice in India's fuel policy. The rise in petrol prices is but a courageous step in the face of a declining rupee and rising crude prices globally.
The price hike could have been delayed, but then who would have paid for the huge subsidy? The only wise and just course was to allow oil-marketing companies to follow market forces and increase petrol prices.
And, by criticising the government for the hike, for whom is the opposition really fighting? It claims to be championing the interests of the masses. But those who are affected by the hike are the well off who own vehicles.
The real masses are the majority of Indians who do not own their own vehicles, but use public transport, walk or cycle to their destinations each day. It is this majority that suffers from the pollution and congestion caused by the rising number of private vehicles. Justice, fairness and equity demanded that the vehicle owners pay up for the comfort of their travel out of their own pockets and not out of the public exchequer.
In their knee-jerk reaction, opposition parties and the media have ended up putting out the fallacy that the fuel-price hike will lead to inflation and will hurt 'aam admi'. Well, the truth is that a rise in petrol prices will have a close to zero impact on inflation since petrol is used only for personal travel and not for transport of goods. Its weightage in the consumer and wholesale price indices is marginal.
Further, 'aam admi' travels by buses, shared auto rickshaws, cycle rickshaws, trains, bicycles and on foot and therefore do not depend on petrol much. However, 'aam admi' will certainly be hurt if the money he pays as direct and indirect taxes is used to subsidise petrol that is consumed by the better off.