Hard times call for hard measures.

This bit of news that came in the newspapers couple of days ago, seems to have escaped the notice of most people.

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If the recommendations of a committee set up by Prime Minister Manmohan Singh to study
the financial health of the state-owned oil companies are accepted, then petrol prices may increase every month by Rs 2.50 so that market rates are reached by March 2009.
--- The Deccan Chronicle, Chennai edition dtd 11-Aug-2008
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While I have been one of those that protest every petrol price hike, I think this is not without
its merits, reasons being the following :
1. If the procurement price of a product increases, naturally those that consume it should pay accordingly. Not a good move to sell below cost price. See Note-1.

2. A hefty hike of Rs.5 per litre of petrol has seen quite some Indians start to respect the fuel
& avoid unnecessary car/bike usage. And even start patronising public transportation, where available. And this has been seen even in the US of A, where public transportation usage has increased and we are seeing a shift from fuel-guzzling SUVs to FE small cars.

3. It has been proven that hiking prices of fossil fuels leads to rational usage of the same among the public. See Note-2.

Note-1 : I know that the actual cost per litre is only 25 bucks or so, with the rest being all sorts of taxes and duties. But those taxes are used for development of the country and if removed, could put a spanner in the wheel for many development activities planned by the Govt.

Note-2 : This has been proven in Denmark (as per an article in the same newspaper of same date) where after the oil shock of the 70s, they decided to move away from being dependent
on MiddleEast oil and from a 90% dependence, they are now at 0% dependence on oil import.
Part of the strategy was imposing huge taxes on oil products, encouraging alternative sources
of energy like wind, promoting cycling etc.

So, if the Govt's plan goes through, and they start the hikes in Sep'08, in March '09, petrol
would be priced at Rs.72.5 ex-Chennai. Not bad I guess, if it makes us use the resource rationally.

And while they are at it, maybe they should also hike diesel prices monthly so that by Mar09,
it becomes on par with petrol, like it is in most parts of the world, instead of subsidising the transportation costs of the rich and upper middle class guys in their Skodas, Mercedes-Benzes, Audis, VWs, Fords, Hyundais and Suzuki Swifts.