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Topic : Should fuel prices be deregulated?
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Fuel price deregulation, who should bear the burden: Government or People?

Created by : Himanshu Pathak, Sr/Principal Coresspondent, Coresspondent  | 02 04 2010 12:21:07 +0000
Industry : Oil & GasFunctional Area : Strategy Alignment(Strategy & Execution)
Keywords : india government people price fuel petrol crude oil diesel finance ministry burden deregulation
Activity:  183 views;  last activity : 07 06 2010 20:18:09 +0000

After food prices inflating, it is now motor fuels to burn the peoples' pocket. The government has decided on freeing petrol and diesel prices after an expert committee on fuel pricing as for the current moderate global oil rates the last window India has to deregulate fuel pricing. An increase of at least Rs 3 a litre in petrol and Re 1 in diesel prices appears very likely around the budget as the government nears the end of its capacity to extend a financial lifeline to state-run oil marketers.

In this game of escape and blame, the ordinary people are totally confused. Feeling the pinch of the real inflation in the market, and seeing rising petrol price the national debate on inflation is more a game between those blaming and those escaping the blame, leaving the truth and the people as casualties.

With such Fuel price deregulation, who should bear the burden: Government or People?

  
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At present the burden must be borne jointly.The govt must declare what it is bearing and make an action plan and within a time frame finish the subsidy being provided
By Rajwant Singh, Country Head- Customer Service, TVS Auto Bangladesh Ltd  | 02 10 2010 13:06:14 +0000
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India, which is hunger for energy consumption has to depend on other countries for crude oil. On the other hand it has resources through which they can barter for this crude oil. With the rising inflation on food prices, normal public could not bare the price burden again. The finance ministry has to decide to pay compensation to public sector oil companies for selling kerosene and cooking gas below cost as it is for consumption. Losses on petrol and diesel are to be compensated by state-owned upstream companies like ONGC, Oil India and GAIL India or improve their production.
By Himanshu Pathak, Sr/Principal Coresspondent, Coresspondent  | 02 04 2010 12:24:28 +0000
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I think, the main factor forcing the government's hands is the rising deficit and cost of economic stimulus, farm support prices besides social sector spendings. The Government does not allow state-run fuel retailers to fix petrol, diesel, kerosene and LPG prices in line with global cost, resulting in huge revenue losses for oil companies and subsidy burden on Government. Rate hike may become inevitable as government's limited financial resources are not enough to meet the revenue lost on selling petrol, diesel, LPG and kerosene below cost. So at such point, people also has to take some burden on such loss.
By Priyank Tewari, Product Development Manager, Reliance Petroleum  | 02 05 2010 04:55:07 +0000
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