Govt explains fuel price hike

Hi,
evening before last, the honourable prime minister of India addressed the nation ragarding the fuel hike by 10% effective 5th June. The way he placed forth the issue was very admirable and I completely agree with the governments decision to hike the prices and the views expressed in the address. In fact I feel that this could have been done at an annual rate of 4-5% for the last 3-4 years to avoid this sudden shock. At least in future the government should mark the domestic fuel rates to the internation crude oil prices.
The crude oil price has increased from $39 for a barrel in 2004 to $130 for a barrel in 2008. The petrol, diesel, LPG, kerosene et al has not gone up anywhere near that.
The deficit in the proces was borne by the government and the oil companies. Had the government not hiked the price the economy would have borne the brunt. The oil companies would have been in doldrums. This price hike is covering only 10% of the actual deficit, the rest is still bridged by the oil companies backed by the government.
It is imperative that we as responsible citizens of this nation take the hint and look for ways and means of saving fuel. Starting from using public transport...at least pooling cars. This would help our nation come out of this oil crisis.
We should also think of our future generations, if we use up all the available fuel they would have none!!! Imagine your great grand children taking a bullock cart to school as there is no more diesel...or imagine your grand children riding horses or walking to work...People would die of heart attacks as there would be no means to transport them to the hospital. We should extend this to all resources...electricity, water, food...should use all resources frugally and ensure that nothing is wasted.
It is also noteworthy that we as end consumers of fuel pay huge state government taxes in form of VAT and octroi. It is now in the hands of the state governments to cushion us against this. Let us see how things turn out.

fuel price rise

Hi,
Indian government has announced a 10% fuel price hike, they would explain the reasons behind this later in the day.
In a way this was a good move, there was no point in over burdening the oil companies. with crude oil prices rising by 35% in last one year a fuel price hike of 10% seems ok.
This should have an adverse impact on the Indian economy in the near future as inflation, which has currently crossed 8%, would shoot up further as tranportation costs, mainly food and utilities, would go up. In the long run however it should get settled.
Have a different view on subsidy on diesel: The subsidy should be applicable to only tranporters while private car owners should pay the full cost of diesel. This I feel would be healthy for the economy as on one hand we are trying to curtail inflation by subsidising diesel at the cost of other economic sectors, while on the other hand the subsidy is being used by the private car owners. In a way the tax payers money is going into the pockets of a rich guy driving a diesel powered mercedes or toyota and not benefitting the masses. The rich would keep getting richer as the poor keep getting poorer. Feel that this is incorrect and that the government should change in stand on subsidy of diesel or increase taxes/duties on sale of diesel powered private cars so that this anomaly is removed.

China earth quake

Hi Guys,
Was unwell yesterday hence no post, was reading about the earthquake in China, saw some really disheartening images. being a parent myself, the 'one couple one child' policy seems very harsh when such incidents occur. Many school buildings collapsed due to the quake leaving thousands of children dead. Pictures of parents holding their dead children brought tears to many...
It was quite amazing how the army came to the rescue of trapped people drained the quake lakes to ensure no further damage was done due to floods, kudos to them.
What is intriguing? Use your imagination to guage the impact of this event on the economy. While China's economy would not be affected as it is very large in scale, it could face some issues on work force front as many young people (mainly students) died.
Could this impact India? would some chinese goods that have become a daily utility become dear to Indians, further fuelling the inflation in India. Mainly due to reduced supply of chinese goods and/or due to reliance on Indian replacements?
The answers for these would be evident as time passes. Leave you with these thoughts...
May god bless the souls that passed away due to the quake in China and the floods in Burma.