Perhaps no other subject has as graphically highlighted the divide between imperial Delhi and the rest of the country as the raging debate on ways and means in which the Central (and state) government should respond to the spot price of crude oil having risen from $30 per barrel two years ago to $130 currently. Inevitably given that most national newspapers and periodicals are based in Delhi, the debate on the appropriate response to soaring crude prices has been dominated by media pundits and intellects sited in the national capital.
Although they are perfectly well aware that raising the already sky-high prices of petroleum products — especially petrol and diesel — commensurately at a time when the wholesale and consumer price indices are at five-year highs — will send a surging inflationary current through the economy, Delhi-based media pundits have almost unani-mously been advocating a massive hike in petrol and diesel prices at the retail level. Their hearts bleed for the country’s public sector crude oil importing and refining companies which are reported to be chalking up losses ranging from Rs.2-3 crore per day for subsidising consumers across the country.
Astonishingly, the national capital’s media mavens seem to be unaware that the major cause of public sector oil companies incurring massive losses is that they first pay huge customs, excise and sales taxes to the Central and state governments before pumping petrol and diesel (at government controlled prices) at the retail level. Or that shorn of all taxes the price of petrol at the pump would be a mere Rs.23 per litre and diesel Rs.18. Against this because of foolish and punitive over-taxation, the price of petrol and diesel at the pump in Bangalore is Rs.53.86 and Rs.36.40 per litre respectively. This over-taxation raises a humungous Rs.155,000 crore per year for the Central and state governments. Insulated by mind-boggling dollar denominated pay packets, smug TV anchors and editors have lost touch with the hinterland reality that high produce transport costs is a major cause of farm suicides which are cursorily mentioned by momentarily sombre-faced TV newscasters before they cheerfully shift focus to Bollywood and the cricket circus.
Yet why blame only television anchors and editors? Writing in the Sunday Times of India (May 25), even Swaminathan Aiyar, ordinarily the country’s most perspicacious economic journalist, opines that substantially higher fuel prices will “push up transport prices a bit”. Et tu Brute?