Fuel price rise: Does consumer opinion count?

For over a month now, media has been discussing the issue of rising crude oil prices and the impact it has had on world economy.

Indian consumers were being told that the government was ‘shielding’ the consumer from the effect of the price rise from US $60 per barrel to US $120 per barrel thanks to the government’s policies of protecting the consumer from inflation.

However, oil companies have now admitted that subsidies on fuel prices have left them bleeding to the extent that in the near future, they would go bust, and fuel would not be available for love or money in the country.

The government’s attitude smells of contempt and indifference towards consumers. A small price rise at periodic intervals over the last two years would have made consumers aware that petrol was not as easily available as one would have liked, and that there was a need to tighten the belt.

Price rise would have also restricted fuel consumption for economic reasons only, leading to lesser burden on the fuel bill for the nation. Instead  of these simple measures to conserve fuel, the government has  chosen the soft path, leading to the present crisis.

The unaware consumer has been buying cars and two-wheelers and guzzling fuel without worrying about the consequences.

The other major step that the government should have taken was to improve public transportation in the country. Even in Mumbai, which is supposed to have the best public transport in India, it is monopolised by BEST, and competition is not permitted. Improvement of the railway system and a Metro system have been successful in Kolkata and Delhi. However, Mumbai’s Metro has not even crossed initial barriers like land acquisition and rehabilitation of project affected persons.

In all modern societies across the globe, CEOs and top executives prefer to use the public transport system, which is efficient and convenient. But Mumbai’s planners never thought of such eventualities in the last few decades.

The politics behind the increase or holding the price of fuels hits the consumer the hardest in the long run. Most consumers may be unaware that more than 50% of the amount collected at petrol pumps goes into government treasuries in the form of duties, excise, taxes, octroi, etc.

The finance ministry is unwilling to part with even a small  percentage of this money to bail out the oil companies, though populist schemes like fertiliser subsidies and loan waivers are tom-tommed as the panacea for the common man.

The government does not wish to take consumers with them in the scheme of things that decide the fate of the consumer fraternity. Protectionism and subsidies are political ploys to lure citizens to vote for the party in power, but citizens would rather prefer good governance and honesty.