When the price of petrol sears our skin


I am a loner by choice.  While being a loner has infinitely more advantages for people like me [who do not possess the skills required for successful social interaction], it has quite a few drawbacks too.  One of the chief drawbacks is the lack of understanding that comes from direct contact.  The resentment against the latest hike in the price of petrol in India is one such thing that transcends my understanding.

I have been reading [the chief source of my information] for quite some time about the rising number of private vehicles in India, and that too very costly cars including imported ones.  For example, “Car sales in the country reached a new high in January despite rising food and fuel prices, higher sticker prices and costlier loans as a buoyant middle class ensured India remained one of the fastest-growing car markets in the world,” says the Economic Times dated 10 Feb 2011.  The report goes on to say, “Domestic car sales grew 26% year-on-year to 1.84 lakh units in January, beating the previous best monthly sales of 1.83 lakh recorded in October, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on Wednesday.”  Further on we read, “The Indian car market has been cruising at almost 30% growth rate month after month for almost two years now as rising disposable incomes, easy availability of loans, a robust economy and a slew of new cars drove Indians to buy vehicles.”

The demand for cars and other private vehicles is on the rise not just in the cities but also in the rural areas, according to SIAM.

I’m not justifying the latest petrol price hike.  Like the patient who was told by his surgeon that the amputation would give him some pain for a few days and then he would get used to it (the pain or the amputation or both), I have got used to price hikes from the time the Sixth Pay Commission was implemented.  Ever since I started earning my monthly income I have got used to price hikes that invariably follow Pay Commission implementations.  The lesson I have learnt is: If you are a wage earner in a low profile profession, your economic status is vaulted by a low ceiling. The height of the ceiling is determined by the various kinds of traders including the landlord who owns your home.

Price hikes don’t surprise me, in short.  What surprises me is the ire of the people who can spend a huge sum on a car but complain of the hike in the price of the fuel.  In Kerala (where I was born and reared) there’s a proverb about a man who could buy an elephant but could not afford the mahout’s tool. 

That, I think, is what the present economic ideology does to most of us. It enables and prods us on to buy a lot of things which become a burden  to us in inconspicuous ways.  

Perhaps, those ways are not so inconspicuous.  It’s just that we don’t want to see them.  [That’s another thing that I don’t understand about people.]

Pranab Mukherjee, India’s Finance Minister, said without mincing words that it was “the prerogative of the oil companies” to raise the price since oil has been deregulated.  It is the prerogative of any company, any trader, to determine the price of his commodity in a deregulated economy.  When the economy was deregulated and (consequently?) the living conditions improved we were happy.  We were proud that India was becoming an economic superpower. Didn’t we know that many erstwhile economic superpowers with deregulated economies were crumbling under the weight of the deregulation?  If we didn’t, it was our mistake.  Ignorance is not a valid reason in the eyes of the law.

In short, if we want to live in a liberal economy enjoying whatever benefits it brings we should also be ready to pay the price for it in accordance with the rules of the game.  Otherwise, we should change the policy.  Go for a welfare economy, anyone?

Tailpiece: There’s a section of Indians which argues that the government oil companies are motivated to raise the price of petroleum products in order to help the private players in the sector who maintain international prices in their outlets.  I don’t know how far that is true.  But such moves are also part of the game of deregulation, I guess.


About matheikal

My more regular blog can be accessed at www.matheikal.blogspot.com
This entry was posted in india and tagged , , , . Bookmark the permalink.

6 Responses to When the price of petrol sears our skin

  1. Raghuram Ekambaram says:

    This is about the best matheikal. Take a bow!

    Raghuram Ekambaram

  2. Aditi says:

    Very good blog, Matheikal. I had written a draft blog too expressing similar sentiments, could not post it so far because of erratic net connectivity…. Just to clarify on the private sector angle, it does not work quite the same way. The private sector makes a killing any way through exports at international price, as it is not at all necessary for them to sell domestically…that onerous responsiblity of keeping the domestic market lubricated is with the public sector alone. It might interest you to know that kerosene , which is a holy cow of sorts, being termed as the fuel of the poor, is sold at Rs 9 a litre in PDS, but since the production of kerosene is not enough in the PSU refineries to keep the market lubricated, they buy kerosene from private sector refineries at international prices and then sell at Rs 9 per litre. Either way the private sector never loses money, only the public sector do.

    • matheikal says:

      Thanks for adding that info, Aditi.
      Kerosene is also used for adulterating diesel and petrol, I was told. We are an ingenious nation!

  3. matheikal,
    I agree with every word of this blog. Price hike is inevitable however, i have raised my apprehensions with regard to the rise in my blog. subsidy on Diesel – we are sitting on a bomb in this regard. opinion differs. i still believe somewhere down the line, the common man is penalized for the inefficiency of the oil companies.

    • matheikal says:

      Thank you, GK, for accepting my invitation.
      As you say, opinions differ.
      As far as the common man being penalised by inefficiency – well, isn’t the common man supposed to be the victim of most inefficiency and corruption in public places?

      I wasn’t really justifying the price hike. I was rather trying to make the reader think about whether the neoliberal system is the best. We may not be able to return to the old welfare economy. But can’t we think of a better alternative to the present system? This is my primary concern which I have put in the blog rather obliquely.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s