Diesel price deregulated!!! I saw many posts, for and against the governments decision. So whats in it for the common man like you and me. It means government will no longer interfere in the pricing of the fuel (unless there is a sudden spike in global crude market) and oil companies will have complete control over the fuel pricing. Now this may sound a bit scary, but it isnt as bad as you think. Indian government have been subsidising the fuel ever since the bullish run of international crude and they have been keeping aside a chunk of their revenue to pay for the subsidy. When i say their revenue, its taxes paid by common man like you and me. Subsidy is a double edged sword when it comes to energy. On one hand it encourages over consumption and on the other hand the government has to pay for the subsidy. Sadly a bulk of our energy is imported so overconsumption leads to increase in imports. Whereas Deregulation allows more companies to enter the retail and wholesale oil market and will compete with each other on price, quality and service. This will bring in much needed investments and chances are more for new oil field discoveries. So what held the government back until now. A couple of things actually. High crude oil price and appeasement for votes. I am glad that the new government showed its spine in taking the regulations away (also to be noted that they got lucky with international crude oil price plummeting) so that i dont have to worry next time when i buy a pack of bread, that 4 rupees out of it is not going to pay a bloke to fill his bmw with diesel Sampath Kevungara Feel free to point out any mistakes
Posted on: Sun, 19 Oct 2014 15:29:33 +0000
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