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Legacy Diaries

Purely a Manufacturing Defect

Are the petroleum products really cheaper in our neighbouring countries?

 With the advent of social networking and instant messaging apps, dissemination of information to the common man is faster than the traditional media’s. However, there are many bogus and malafide claims with or without intention to spread fake information’s which are believed to be true by the users without verifying their authenticity. One such claim is related to the retail pricing of petroleum products in India vis-a-vis our neighbouring countries. Below is once such bogus post in a Facebook page. I am sure almost all of us would have read such stories in some way.


The official data published in the Petroleum Planning and Analysis Cell (PPAC), under the Ministry of Petroleum and Natural Gas, Government of India is published below gives us a different picture.


What the data reveals?

Petrol Cost
  • The present petrol cost in India is almost on par with our neighbouring countries, when calculated in Indian Rupees.
  • If even a Rupee difference is considered big, then we should look about how much the people in Pakistan and Sri Lanka pay in their respective currencies. Pakistani’s pay approximately Rs.80/L in Pakistani Rupee and Sri Lankans pay approximately Rs.117/ L in Sri Lankan Rupee.
  • Though the above comparison in their own currencies is not the right way to compare, it gives us a hint about its impact in their wallet.

Diesel, Kerosene and LPG prices
  • India has the lowest cost among all the nations for Diesel, Kerosene and LPG prices.
  • To me, the price of Diesel, Kerosene and LPG has more direct impact on the poor, than the petrol prices which benefits only the middle and upper classes.
My take on various taxes on these petroleum products
 It is true that various taxes levied increase the price of petroleum products. As on September 1, 2015 the cost paid by Oil Marketing Companies (OMC's) for a litre of petrol to refineries is Rs.25.40 (in HP). Where as the market price charged on consumers is around Rs.61.25. Out of the difference of Rs.35.85, Rs.29.71 is collected as tax, which is 48.25% of the cost of the petrol. Many point to this difference and ask for a reduction in petrol prices by reducing the taxes levied. As an individual personally I am not in  favour (specifically for petrol) of it. 

My stand as of now is due to the following reasons
,
  • Petrol in contrast with Diesel, Kerosene or LPG is used by Middle and Upper Classes of the Indian society. Why not someone like me who can spend Rs.75,000 for a Pulsar, cannot pay the additional cost as tax. Though they call it as Excise, VAT and so on, I see it as Carbon Tax for the pollution I make. If any reduction could be done, then the same can be done in Diesel, Kerosene or LPG which reaches the poor directly and indirectly.
  • The world we live is not exclusive for human beings, we are just part of the living world. After all decrease in petrol cost increases our chances to use personal vehicles there by increasing  pollution. Are we ready to kill the flora and fauna of this planet?
  • People may prefer to use their own or buy new vehicles, thereby increasing traffic congestion in cities and need for more flyovers, bridges and roads. From where does this money come from? After all we have to be taxed again at an additional cost of environment which increases our medical bill.
  • The quantum of price that may be reduced can be invested in developing better public transports to promote citizens to use public transport rather than individual vehicles. Why not a dedicated public transport corridor in a traffic congested city?

Let us from now let not be moved away by fake and bogus claims and instead being an educated try to understand the issues in a broader sense and think in a rationalistic way.





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