India is a country of contractions - we are ruled by a supposedly economically Right wing party - who can be said to have followed a broadly welfarist approach to Governance over the last five years. One expects a largely capitalist approach to markets from modiji and what you get often is an interfering, meddling and regulating government. Why does that happen - the simple answer to that is elections.
Sample this over the last one month the crude oil prices have gone up by approx 10% (12% if we go by prices two days back) from approx $59 to $65. However, the petrol prices in India (basis Delhi Retail Prices) have barely moved from Rs. 72.85 a litre to Rs 73.05 per litre and Diesel Prices have risen from Rs 66.40 per litre to, hold your breath, Rs. 66.55 per litre.
Some bhakts may start smiling - see government is worried about the burden of inflationary pressures due to this on the Aam Aadmi. Hold on to your smiles and take a selfie as you read this. Because the reason is not a new found welfarist economic policy but the reason is lok sabha elections. It is almost a trend now - a few weeks before any major election the Modi government will shadow control the petrol diesel prices so that they do not move upwards and create a dissonance among voting public.
I had written a facebook post way back on 12th May 2018 when a crucial Karnataka assembly elections were going on. At that time too Crude oil price (Indian basket) shot up 9+% in one month. Karnataka elections have ensured that in India - fuel prices have inched up less than 1%.
And then later I had written a detailed post (Read here ) on how the petrol/diesel prices surged within a week to catch up with International prices - once elections were over and the Government had no immediate elections to face.
And just as a proof to what I am saying here are two charts - one showing six months movement of International crude oil and the other petrol/diesel retail prices in India. Look at the close correlation in their movements - showing clearly that the government wasn't otherwise too worried about micromanaging fuel prices.
So dear reader - take my advice if you did not last November - on the last day of this election season - top your fuel tanks because if the International crude prices keep showing the same trend as they have been lately - then you will see a sudden surge in petrol/diesel prices.
This shadow regulation is so wrong at so many levels that people should respond to it with their votes. First, Petrol and Diesel have been deregulated and so they are marked to market now. The only way government should now be able to influence fuel prices is through change in taxation on the commodity. This shadow management of prices is bad policy and cheating at the same time. (Well I a repeating myself because cheating is bad policy, anyways). Secondly, such cynical short term management also reflects poorly on how the ruling party treats the general voter as a gullible, unintelligent someone with short memory who can be easily swayed into believing all is well by such short term management. Third, it also points out to the utter lack of any strong and credible opposition in our democracy. If they cannot point out to such obvious tactics - then what is the role they are playing in a democracy. Fourth, it is a sham when a economically right wing government plays worse politics then a left wing welfarist one.
I am tempted to right that perhaps Modiji is right - we Indian voters actually are such gullible even foolish people at times because we are taken for a ride by such senseless short term policy tinkering.
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| Crude Oil Price - One month (Mar-Apr) - Source - tradingeconomics.com |
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| Petrol-Diesel retail price - Delhi src : mypetrolprice.com |
I had written a facebook post way back on 12th May 2018 when a crucial Karnataka assembly elections were going on. At that time too Crude oil price (Indian basket) shot up 9+% in one month. Karnataka elections have ensured that in India - fuel prices have inched up less than 1%.
And then later I had written a detailed post (Read here ) on how the petrol/diesel prices surged within a week to catch up with International prices - once elections were over and the Government had no immediate elections to face.
 |
| Six Month Crude Oil Price Src : tradingeconomics.com |
 |
| Six Months Retail Price (Petrol-diesel) src - mypetrolprice.com |
So dear reader - take my advice if you did not last November - on the last day of this election season - top your fuel tanks because if the International crude prices keep showing the same trend as they have been lately - then you will see a sudden surge in petrol/diesel prices.
This shadow regulation is so wrong at so many levels that people should respond to it with their votes. First, Petrol and Diesel have been deregulated and so they are marked to market now. The only way government should now be able to influence fuel prices is through change in taxation on the commodity. This shadow management of prices is bad policy and cheating at the same time. (Well I a repeating myself because cheating is bad policy, anyways). Secondly, such cynical short term management also reflects poorly on how the ruling party treats the general voter as a gullible, unintelligent someone with short memory who can be easily swayed into believing all is well by such short term management. Third, it also points out to the utter lack of any strong and credible opposition in our democracy. If they cannot point out to such obvious tactics - then what is the role they are playing in a democracy. Fourth, it is a sham when a economically right wing government plays worse politics then a left wing welfarist one.
I am tempted to right that perhaps Modiji is right - we Indian voters actually are such gullible even foolish people at times because we are taken for a ride by such senseless short term policy tinkering.
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