Double, Double Oil & Trouble

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Oil & TroubleGold Silver Reports — Double, Double Oil & Trouble — Opposites meet in politics, sometimes piquantly acro ssdecades. Union minister Alphons Kannanthanam’s remarks on fuel prices took me back to the early days of Bengal’s Left Front government.

The leftists were unfazed by the state’s power crisis. (To do them justice, they soon changed their stand.) Chief minister Jyoti Basu made his memorable remark, “Can we eat electricity?“ Their take was that power shortage only hurt the rich, who had to swelter without fans and air conditioners. There was no perception that factories and irrigation needed power, to generate employment and, yes, feed the people.

Unwittingly , taking a leaf out of the Marxists’ book, Kannanthanam (from Kerala, after all) would persuade us that only the well-heeled are affected by oil prices: let them pay more to flaunt their cars and bikes. The Union government will make them sweat to benefit the poor. It is heartening to find this Robin Hood stance in a BJP minister.

But someone should tell him that goods of all kinds, including those catering to the poorest, are transported in vehicles run on fuel. A 2013 Nielsen report for the petroleum ministry found 58.45% of India’s retail demand for diesel was for public transport and commercial (chiefly goods) vehicles, 14.11% for agriculture and 8.22% for industry and mobile towers. The proportions cannot have changed radically in four years.

To say that only the affluent are affected by fuel price rises, because they alone buy directly for private use, is like saying that only the affluent pay taxes because they alone pay direct taxes. It was considered a commonplace that a hike in diesel prices pushesup all costs, obviously with most hardship to those with least cushioned wallets. If a new economic wisdom suggests otherwise, we may be told why .

Oil’s Not Well

We might seek a little more enlightenment. If the State wants fuel prices to respond to the global market, it must tell us why retail rates remain virtually unchanged when world crude prices drop by half. The explanationshould cover the broad picture over three years, not short-term blips like Hurricane Irma. If, contrarily , the government wants to top up low crude prices with taxes to a preset level, let it announce that intent. Let it also explain how such a policy differs from state-administered prices of the hoary discredited type. Either way , let it be frank with the citizen if it cares for the latter’s trust.

It also seems bizarre for a responsible member of government to argue that any price is justified if the customer can pay it, regardless of costing and input. I would protest if a shop charged me ` . 100 for a box of matches, although paying it would not drive me bankrupt. The minister has created a template for any trader to demand any price he can prise out of the customer.

Ah, says Kannanthanam, but the purpose of the exercise is to help the poor. The self-absorbed middle class has ignored this aspect of his utterance. Yet, this is the feature that reflects most on the government’s prio rities. If meant seriously , it would im ply a major policy shift: at least in he alth and education (mentioned by Kannanthanam almost as an afterth ought, following housing, power and sanitation), helping our poorest cou ntrymen has not been a priority of this government so far.

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In primary schooling and child wel fare, the allocation for the Sarva Shik sha Abhiyan is 12% less, and for the Midday Meal Scheme 18% less, in 2017-18 than in 2013-14; for Integrated Child Development Services (ICDS), catering to India’s poorest four crore children and nearly one crore mothe rs, less than 2014-15 in 2015-16 and 2016 17, and only marginally more in 2017 18 -in all cases, before adjusting for inflation. In fact, the 2015-16 ICDS bud get was initially 50% lower than the previous year. This leaves out of ac count the underspending, delays and defaults endemic to these schemes.

The health budget for 2014-15 was slashed by 20% from the initial allo cation, and has risen only sluggishly thereafter, especially after allowing for inflation. Admittedly, the states now get a higher share of central re venue, and garner their own taxes from petroleum products: if they re duced the last or agreed to the goods and services tax (GST), prices would fall. But their increased responsibility for the social sector makes them reluctant to do so.

I Think, Therefore You Are

Let me return to the petroleum ministry for my last example. Remember the Prime Minister’s call to give up LPG (liquefied petroleum gas) subsidy to `light the flame in a poor man’s home’? Yet, by a UPA order not rescinded to this day , LPG for midday meals in schools and anganwadis receives no subsidy . If the government has indeed changed its heart, let it reverse this order as a token of good intent.

But this is to give too much importance to one man’s thoughtless outburst. What is really biting us is the underlying mindset, which seems endemic to our rulers.

They need not care what we think, hence do not weigh their words on matters of public import. Kannanthanam has fobbed us off with some casual remarks off the top of his head.Our feelings are hurt. — Neal Bhai Reports

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