Wednesday, 24 October 2012




As we all knew that fuel prices also determine the out of the agriculture as well as agriculture output price since majority of the farmers are dependent on ground water or water to be lifted from wells, far way places through motor pumps, operated by diesel as these motors are supposed to be operated by the electric current, but due to the acute power shortage in the villages with less than 6 hours of power supply in villages on an average. Also the diesel prices will determine the prices of goods in the retail market due to the transport cost depends up on the diesel price. After all everyone is working for the food only at first, as such government must ensure food prices are stable at all times, As such government must keep the diesel prices very low all the times to ensure the food prices are stable all the times by providing maximum subside on the diesel for the farm sector and the goods transport sector, as these sectors consume less than 1/6th of the total diesel consumption approximately. Since the oil companies are running into heavy losses due to heavy fuel subsidies, government providing on all fuels, but it is very unfortunate the government got the people addicted to the subsidies for decades together, it is very dangerous trend that was adopted by the governments in past and continued till date subsidizing all the fuels and the loses due to the fuel subsidy is being absorbed by the government leading to hampering the development as well as welfare activities in the Country weakening the country’s economy.

As such the government must strengthen the economy by             partial de control of the fuel prices over a period of time ( most ideal within a year in three or four quarters) by completely lifting the subsidies on the fuel (only petrol and diesel) and selling the fuel at the market price with exception to fuel to the agriculture (diesel), fuel to the goods transport (Diesel) especially food supply vehicles like milk vans, groceries carriers etc and fuel to the house hold cooking (kerosene, LPG),  if we look at the consumption of the fuel the Transport  sector consumes 51% of the total fuels (Petrol, Diesel, CNG, Aviation fuel), where as the Industry  sector consumes 14% (Petrol, Diesel, Fuel oil, Naphtha, Natural Gas), where as the Commercial sector & other sectors consume 13%, and the Domestic sector consumes 18% ( LPG & Kerosene) and the Agriculture sector consumes 4%(Diesel) of the total fuel consumption in India. the statistics shows that for every 1000 population in India the number of vehicles are around 113 out of with no of cars is around 11 and around 102 the number of two wheelers with the total vehicle population in India is around 12 crores.


Also the kerosene and LPG should be continued at the present rate of subsidies as the people are tuned for this rate without enhancing further and the losses should be completely absorbed by the government only, and introduce the pricing of the LPG as per the income group and determine the number of refill cylinders as per the income group which is the ultimate social solution to the economic issue as this system reduces the subsidy burden on the LPG by over 70 % of the total burden on government. Since the agriculture sector consumes only 4 % of the total fuel consumption there is no much burden on government to provide subsidies to the agriculture sector, which has a great impact on the agriculture production, cost of the food grains.

Also it is ideal that there should not be any restriction in the issue of number of refill cylinders of LGP, it is most ideal that the cost of LPG refill cylinders in future should be  placed as per the annual income of the family by making it mandatory integration of the gas registration numbers with the PDS cards and also Income tax pan number and also on getting the Affidavit from the gas connection owner about the family income which should be subjected to verification through the income tax department and also with punishments for wrong declaration equivalent to suspension of gas connection for one year by making them to surrender the regulator or face the the imprisonment for few months. This will ensure that subsidies will be only for the poor and burden on the BPL and Low income and middle income group should be less as the costs of the LPG Refill cylinders should be placed under seven rate structures, the BPL families Rs 50 less than the present subsidy rate, all the Low Income group at the present subsidy rate, All the middle income group (low, middle, higher middle income group with low middle income group Rs 50 more than the present rate, middle middle income group Rs 75 more than the present rate and the higher middle income group Rs 100 more than the current rate) and the higher income group use should be Rs 150 more than actual cost and the commercial use LPG refills should be Rs 200 more than the actual cost. Also government must provide subsidized LPG commercial refill cylinders for all the welfare hostels of SC, ST and OBC and also all the angan wadies, all old age homes, all the hospital kitchens, all kittens/restaurants located  and operated by in government school, college, university and government offices, private factories, industrial canteens  and also in all the religious institutes and temples, gurudwaras, churches, masjids etc and also in places where NGO’s run orphan centres for poor feedings etc where ever food is prepared etc should be provided with the subsidized commercial refill LPG cylinders. Also it should be most ideal that BPL families should be given 9 cylinders, the low income group should be given 12 cylinders and middle income group & higher income group should be given 15 to 18 cylinders; with providing the number in each refill cylinder and purely on the surrender of the previous refill only new refill should be provided. This numbering of the cylinders will ensure that the cylinders use for each category will not be misused by them due to the low cost for the various categories compared to other higher categories. This will reduce the fuel LPG, kerosene by over 70 % to the government.


Also in order to reduce the  burden on the common man transport  by two wheelers, three wheelers and passenger cars due to de regulation of petrol prices, the government must make it mandatory that all the schools, colleges and office establishments both government, private to provide the bus transport to the students and employees to reduce the fuel burden on the individuals, this will help not only in reducing the fuel burden on the individual but also reduces the environment pollution in urban , semi urban areas where the maximum pollution is caused by the personal vehicles due to the use for schools and office purposes which ranges from 60 to 85% of the total vehicle traffic in the cities and urban areas.  The statistics shows that out of total vehicle population in India 72% vehicles are two wheelers, 13 % are passenger cars & jeeps and 5 % are goods & commercial vehicles and 1.2% are buses and remaining other including tractors, three wheelers etc. The statistics of the fuel consumption value in India shows that over 74% of the diesel, 22 % of the petrol and 3% CNG/LPG and 1% of the electric fuel. Also the vehicular population majority are two stroke two wheelers which consume more fuel in total volumes and also emit more pollution which can reduced by providing the multi mode rapid transport system, also by making mandatory all students and employees should use the bus transport for reaching the educational institutions and offices with complete ban of entry of personal vehicles in the office premises and debarring the students from the educational institutions for not using the bus provided by the educational institute other wise use of the bicycles and electric vehicles should be permitted.  As it saves lot of fuel, as studies indicate diesel buses rank the highest at the range of 25 to 40 liters per 100 km travel. The least fuel efficient motorbikes, consuming less than 2.5 litters per 100 km. Diesel and petrol cars burn about 7 to 10 liters per 100 km. If we analyze the quantity of fuel in liters per person per 100 km, assuming that all the vehicles are fully loaded, i.e., 50 people for a bus, 2 people for a car and one people for a motorbike. Then petrol motorbike requires 2-4 liters per person-100 km travel, but a bus rider consumes no more than 0.8 liters to 1.25 liters of diesel per person. Diesel and gasoline cars are in the range between 3 liters to 4 liters per person-100 km. It clearly indicates that bus transport will save lot of fuel as well as traffic pollution and traffic congestion. As such government must make it mandatory that all schools and offices should compulsorily maintain the buses and all the students/employees should use the school/office bus to reach to the school/office from home and return from school/office to the home, all the official office work can be performed in the office passenger cars/vehicles. To make it a hassle free due to congestion in traffic due to buses, government should ensure variable timings of schools/offices in the cities and towns from 7 am, 8 am, 9 am 9.30 am in schools and 7 am to 3 pm, 8 am to 4 pm, 9 am to 5 pm and 10 am to 6 pm adjusting as per timings based on the traffic in the areas coordination between the schools and offices in the area.


Also government must mandatorily constitute Central Petro Fuels Network Authority (CPFNA) by integrating all the fuel dispensing pumps with the all State Transport Authorities computerised data of the registered vehicles & the valid driving licence holders and re issue/ new issue of electronic chip based cards for the vehicle registration and the drivers licence, making the computer system integrated with the petrol pumps issue fuel only on reading the electronic  vehicle registration card  as well as the electronic driving licence card which ensures that the vehicle is fit by ensuring the mandatory vehicle pollution checks periodically (otherwise the fuel issue will be barred by non delivery registry in the vehicle in the RTA office and through CPFNA system- as mentioned in my document “simple and effective reforms for controlling corruption and delivering good governance “ in the sub heading “transport sector reforms”- Dec-2011) make the fuel dispensed through the fuel pumps. Also this will ensure that the fuel dispensed for the goods vehicles can get the subsidized fuel as in the system of CPFNA the category of the vehicles can be registered. Also for the passenger cars and taxies can be identified in the system separately, Also the passenger cars can be dived into five segments i.e “B segment cars” with value less than 5 lack rupees, the “C segment cars” with value ranging from Rs 5 to Rs 10 lacks and “D segment cars” value ranging from Rs 11 to Rs 25 lacks and “E segment cars” with value between Rs 26 to Rs 45 lacks and “F segment cars” with value above  Rs 46 lacks, all the value of new cars at the time of first registration of the vehicle. The cost of the fuel for the cars should be based on the segment of the car to ensure that even middle class and higher class should have the difference of cost variation of fuel. Also the fuel issue for all two wheelers above Rs one lack should be on par with “D segment cars” Also in this method the fuel can be priced based on the use of quantity and also based on the type of the vehicle i.e two wheels and four wheelers and the SUV/MUV through the entry in the CPFNA system  while issuing the re registered / new electronic vehicle registration cards, to ensure that low income and middle income group who uses the two wheelers will get a  concessional rate for first 25 litres the cost of fuel is Rs X per litre, for use above the 25 litres the cost of fuel is greater than Rs X per litre. Also in the case of cars the same with first 100 liters should have one rate and over and above 100 liters more rate within the segments of the cars. Also the separate rate of fuel for the two wheelers which is should be less than the four wheelers, likewise the fuel for the private passenger car taxies should be reduced to some extent. Also the fuel subsidies should be extended to state road transport vehicles and the private public carrier vehicles more than 12 seats and the railways in order keep the momentum of people using more public transport reducing the use of fuel as well as reducing the traffic pollution, reducing the traffic congestions, Also similarly the SUV and MUV passenger cars should be charged more as they belong to upper echelons of society.

Also the congress party should ensure that government must absorb maximum fuel subsidy for household supply of the cooking gas LPG cost (which accounts only 18% of the total fuel costs in India) especially for the BPL, Low income group and low middle income group, as it touches their family lives directly, especially women who has a greater influence on the family, also government should encourage the establishment of goober gas plants in villages and ensure the villages uses the goober gas instead of dry fossil forest produce for cooking as the statistics shows over 85 % of the cooking in villages is using the fossil fuel only 5 % kerosene & 2 % LPG gas.


So the first and foremost thing government should make is to make a plan within three months to get the data integration of all PDS cards and the Pan cards and colleting the voluntary affidavit submission from the LPG consumers regarding the income status in the LPG supply centres in their locality, then the scrutiny of the data and the delivery of the LPG based on the income structure should start less than six months from now.

The second thing is to issue guidelines for all the educational institutions, offices both government as well as private to make arrangements for bus transport and coordination with local municipal, police to fix the suitable timings for the educational institutions and offices in that locality to avoid traffic congestion. And making it mandatory that from next financial year for the offices and next calendar year for the educational institutions to mandatorily use the bus transport and completely banning the individual vehicle transport to reach the office/educational institution. To ensure the strict implementation all offices/ office complexes and educational institutions should mandatorily fix the CC Cameras at the entrance and exit routes of the educational institutions and offices, Also the municipal and police authorities to put the CC cameras at the entrance of the road / lane leading to the educational institute / office to monitor the entry, exit to prevent the individual vehicle use.

The third thing is to start immediately incorporating the electronic data card readers in all fuel issue stations i.e petrol pumps and diesel pumps, simultaneously government must fix a time frame of six months for re registering the vehicle registration to be issued in the electronic smart card, and re registration of the driving licences, apart from issue of new vehicle registration as well as driving licences in the electronic smart card form.

The fourth thing is to integrate the Road Transport Authority data of different districts with states and different states with the CPFNA. With classification of vehicles as per the  sector, value like the commercial vehicle, the buses, the passenger car taxies, the goods carriers, the personal passenger cars as per their value etc.

The fifth most important thing is to to start de regulating process and complete in six months to provide the fuel at market  price for sectors other than the eligible for subsidy and pricing based on the sector wise and value of the vehicle wise, use of the fuel wise.  This process should be stated six months before the CPFNA is about to get ready to be operate able. All this process should be completed within 18 months from now. This will ensure from the 2014 April onwards governments burden on fuel subsidies will start reducing to the extent of 60 to 65 % of the total burden, making from 2015 April onwards over one lack crores burden will be reduced on the government, and at the same time over two lack crores burden will be reduced on individuals for using the bus transport for going to educational institutions as well as offices, which means over two lack crores rupees per year is saving of the people of India remain in banks/post offices or in the market means more productivity as the purchase power got increased. Also every year government saving of  Rs one lack croes on account of fuel subsidy reduction may be utilised for creation of better health care, better sanitary facilities in the schools, better education, better nutrition for children & women, better roads etc by spending the same amount through year after year savings attributed due to fuel subsidy reduction.


This system of fuel delivery & different cost structure of fuels for different class of people will certainly emphasises that “governments are thinking rationally” while making the policies and also ensures the “responsible behaviour from the people”, which will enable the delivery system certainly be a WIN-WIN and shall be appreciated by all sections of the people for doing justice to them as well as the country since the economy is stable due to drastic reduction in the fuel subsidies, more strengthen economy means more better rating by the international rating agencies, better rating means more investment friendly atmosphere means more development activities means more  jobs & more growth rate means more comforts and facilities for the people. Also more subsidies on fuel to agriculture means more agriculture output means more food at economy price and more nutritional food means more healthy life for the people of the country.

1 comment:

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