Increasing the price of fuel in India will only lead to more problems since the cost of the daily commodities will go up. To reduce subsidy the govt must take the following corrective actions.

1) The benefits paid to the employees of the oil companies are so huge that the employees need not even touch the basic salary of them every month. The travel allowance paid to an employee is roughly around Rs.40000/- per month to some category of employees where he never utilizes that money and travels only by train. just imagine the other salary components like Basic Salary and other allowances. Apart from the travel allowance each employee of the Oil company can refill their vehicles free of cost which is again at a common man’s cost. Other benefits like providing free education to the children of the oil companies. Why should all these benefits be provided to the employees of the oil companies? Are they working so hard like our Army friends? where actual benefits to our Army friends are only 1/10th of what being paid to the oil company employees.

2) Why people are looking for more luxury SUVs and Cars is because they are looking for more comfort. Do we have or can provide that comfort in the public transportation? Look at the old buses and trains running which are almost 15 to 20 years old. Look at the worst roads in india which is again leading to more maintenance to the public and private vehicles.

3) Subsidy should be given to Petrol and Diesel to avoid the poor committing suicide. If the poor cannot afford to buy the commodities at the rising prices obviously more people have already started committing suicide. We need to stop this from happening. Let the price of the oil come down which would eventually have an impact in the country’s growth.

Only if the price of the oil comes down the entire world can live peacefully otherwise we all will cannot live peacefully.

Diesel should be provided some subsidy and not petrol as petrol in India is not being used for mass transportation.

Yes we are unnecessarily encouraging Rich and upper middle class people to enjoy at the expense of the rest of the poor in India.

Social justice has to prevail and we cannot afford to become a capitalistic state like USA.

There might be some truth in what you are saying about speculation, but till date this accusation has not been supported by any concrete facts, up until now the only report of any substance that has come out is the one by a US Congressional Sub-committee, and the figures it has come out are that investments by pension funds, sovereign wealth funds and endowment funds in commodity futures increased from $13 billion at the end of 2003 to $260 billion in March 2008. This is a really large increase, but this does not in any way mean that speculation has increased, what it simply means is that more and more countries are now hedging against a future price rise by buying in the futures market, and for the futures market to accommodate such a large increase in buyers there has to be a corresponding increase in investments by non-buyers like pension funds, sovereign wealth funds etc.

Even if there is speculation can you be sure out of the current price of $140 how much is due to speculation? By the end of next year prices could go below $100 or they could go above $200, both scenarios are equally likely. The only viable way ahead is to pass on the price of petrol to the consumers, we can no longer have our economy dancing to the tunes of Oil prices in the International Markets. Increasing prices is a difficult thing to do but it is the only way our economy is going to survive this onslaught led by Oil Prices. By maintaining the status quo and doing nothing we would be giving away all the economic gains that we made in the last few years, all in the name of petrol prices.

The whole prices of the oil is going up purely based on speculation. There is no shortage of oil by itself. After the election in the US, we should see some correction in the oil market. Hitting $100 per barrel was a milestone not long ago that looked hard to reach. Now, $100 per barrel looks so cheap. It is only speculation.

Ramesh
The Geek Stuff