Kerosene & Diesel: Yet Not Right Time for Price Decontrol

    Government of India has price control on all the petroleum products barring petrol which was decontrol on 25th june,2010 , and it has made oil basket, when it consider that to bear lose further through subsidies are not possible then it increase the prices of petroleum products to ease the pressure. With decontrol of price mechanism oil companies are allowed to set the price as per international markets on every fortnight basis, but it is still giving subsidies on to other petroleum products, which is –

• Diesel- On sale of every liters of diesel in the country government of India is giving subsidy of rupees 3.80.
• Kerosene – Government exchequer is bearing rupees 18.82 on sale of kerosene sell on ration depots.
• Gas Cylinder – On the sale of every domestic cylinder government is giving subsidies of rupees 261.90.

Question rises here why government of India is giving subsidies on to three petroleum products? Why not it deregulates these three also? Its answer is in the democratic set up of country as every government get approximately five years to rule, then they have to get people verdict to rule next time also and if it takes harsh step of deregulation then for them its not easy to convince people that there step was right, as kerosene is considered fuel of poor people and diesel directly link with common people as more then seventy percent movements of goods from one place to another in the country is done by transport companies and with increase of diesel prices they will increase the freight prices thus ultimately it has to be bear by public and LPG cylinder is fuel of every household of this country, so pulling out the subsidies from these products it is certain across country there will be lot of noises from all the sectors, so government of India remain under political pressure to bear the subsidies.
     Recently while talking to media persons, newly appointed Union Petroleum & Natural Gas Minster, Mr. Jaipal Reddy express government side of story on to moving out from price control mechanism of remaining three petroleum products and said it is not possible politically to hand over price control to market forces as these are related to the mass of the country, thus it is very sensitive issue, so government is not ready to exit from price control mechanism, but to check black marketers and adulteration of kerosene government has taken some initiatives and with the help of state governments it will soon be going to implemented in the country, while explaining it to the gathered media persons he adds that he has stress and announce marker programme and pass on directive to oil companies that up to June,2011 they start marker program on to the sale of kerosene which sold on to ration depots so that black marketers and adulteration can be checked. Union Petroleum and Natural Gas Minister said that states asked to make it sure to adopt system as it is mandatory on petrol/diesel tankers of G.P.S, with this every movement of tanker will be under surveillance.
     Government of India’s any steps withheld by corrupt/mafia in the past relating to petroleum products, once G.P.S. system effective on tanker then it will not be easy for black markets and adulteration lobby to break down digital technology and play the game of black market and adulteration of petroleum products in the country.