Expert shares views on rising price of petrol, diesel

Vijaykumar Jayaram

Chennai: Millions keep pondering on why is the fuel price high in India when compared to other nations. This means such people have already done the currency value conversions of on the comparative nations. But have they taken into consideration the time value of money, asks professor Vijaykumar Jayaram (VKJ).

Speaking to ‘News Today’, VKJ, says, “Let’s see a Google search return. In the year 1947 as the news media reported on the departure of British from free India, these were the commodity prices in Rs. – Petrol per litre cost 0.27 and milk cost 0.12. This means petrol was two and quarter times more than milk. What is it now in 2021? Even today petrol is 2.25 times that of quality milk! So why are most men in India always complaining about fuel price hike? Women, some of whom are good drivers have lesser complaints, in fact nowadays only men complain about the price hikes on the other hand women complain about the quality of materials and services. Let’s encourage all readers to do a little more research, a sort of Quick and Daring Analysis – a QDA is what I would call it.”

He adds, “A cinema ticket in 1947 cost Rs. 0.30 and a flight from Delhi to Mumbai cost Rs. 140 (this was more than the price of gold). Now, just compare the last 73 years price of goods and services to what is the price fluctuations happening now, look for the ratio and proportions and you will find more similarities than differences. Rather jokingly quip – we as a nation have not changed much?”

“We Indians, all have the same cribbing complaining attitudes, I mean look at the
incredible Japanese, after WW2 they gave a run even to the American supremacy in terms of quality in manufacturing. Well today Indian has see CW2 (Covid wave 2) and with a badly bruised economy almost akin to a war torn zone we are still complaining.”

“It is high time we learn to build a constructive opposition. It is high time all Indians learn some basic economics, politics and fundamentals of mass psychology. Now comes the last the final question – If fuel is the basic need of all Indians, why is the government levying so much taxes? (even after Independence). Simple answer – with 85 per cent fuel being imported neither the opposition (when in power) or the current government has any choice. The only solution to this is – Increase E-vehicles and a quick term solution would be is for India to do an international backward integration with respect to oil sourcing. This means we buy out or collaborate in manufacturing oil outside India. Seriously that is the best solution.”

After all with amount fuel pollution we Indians do not only in Delhi, but in other parts of our Bharath, we shouldn’t mind the taxes on fuel. I mean to me all the political party leaders hungamma on the fuel price hike, crying hoarse that this will affect vegetable prices and even other prices, I have one question – have these mahanubhavas ever studied what is everyday low pricing (EDLP)? In the past, when the prices of tomatoes or onions or gold sky rocketed, even without a fuel price hike, where were these protestors? What are their explanations? Surely tomatoes or onions have a Rs. 2 to Rs. 6 price fluctuation, don’t they? Now the same applies to fuel in a free market, he adds.

“Former RBI Governor Raghuram Rajan once explained about Samuelson-Balassa effect as a student questioned when all prices were falling, why is Dosa cost going up and not coming down? I don’t how many understood or did the message not reach the masses?”

Last but not the least bringing the fuel price under GST is technically not feasible but not impossible. My point is it will not give a permanent solution to the curse of fossil fuel prices. The best we Indians can do is gradually move into a better attitude of accepting theeconomics as we experience. Last but not the least adopt electric vehicles and or still best increase our share in fuel production around the globe. Our desi fuel scientists are already working on certain models that will help us collaborate or share Oil manufacturing capabilities in the middle east, he winds up.

 

NT Bureau