The devastating news of the rise in petrol prices last year by Rs. 7.50 announced by the Government appears like a bolt from blue! As expected most of the news channels made a big noise and had heated discussions with as many as 5 speakers in partitioned screens. [This is a lovely feature we are getting used to, where everyone is shouting at the same time! May be subject of blog someday] Most of these channels have double standards. While the show anchors are showing as if they are the only keepers of the good word, they have separate shows, mostly during afternoons, on advising car performance, selection and discussing new models of cars, mostly expensive foreign brands. How can they discuss the pros and cons of these models and recommend “Buying” some models on one program and criticize the government on falling rupee or rising petrol prices? Isn’t there a cause-result relationship in these two? There is a systematic campaign by foreign auto brands to woo buyers in India and other emerging markets as sales in Europe, the US and UK are dwindling. This is a two-way whammy. On the one hand, there is practically no driving space on roads in any medium to large size city in India, on the other, every addition of cars adds to the oil bill of the country (and of course emissions inventory!). An interesting figure I heard, is every one rupee fall in dollar exchange rate adds Rs. 8000 crore in our forex outgo for oil!
The government has realized that with every rise in petrol price there is a murmur of protest for two/three days (sometimes causing a minuscule rollback)and then people adjust to the higher pay-out. I tried to find out the reasons for this and soon realized it. The question is who bears the burden of the rise. Most people who buy big cars, get the hike reimbursed from their employers who any way pay the employees in terms of liters of petrol per month (I heard normal range is 150 – 300 liters depending on seniority)! So who is bothered if the petrol costs Rs. 70 or even 200 per liter. There is definitely a case for differential pricing of diesel, for cars and for other heavy vehicles. Most of the diesel cars are big luxury ones. Why should they get subsidized diesel? I heard the then FM Pranab da hinted to dual pricing in the house and hell broke out! He had to rescind from his intentions as all his colleagues and their kin and friends might be owning multiple numbers of such cars!
I feel the best solution to fight these frequent hikes in petroleum products as well as holding at the strike points by the auto/taxi drivers (the subject of another blog someday) is to own two bicycles (would hardly cost Rs. 3000 or <1% of the price of a low budget car)! One, to be kept at their place of residence and others at the place of work. For example for people in Mumbai (blogger is from the crowded suburban city, but this can be easily adopted to other metros or growing towns), a person can have a bicycle which can be taken from home to nearby station on suburban track and left at a parking for cycles (an opportunity for young entrepreneurs and for youth wings of political parties) in the morning. From the terminus like Churchgate or CST (still, think of it as VT!) take another to the respective office building. Thus, we need cycle stands at each station and big ones at the terminus stations. There are many advantages, final escape from the blackmail of the auto owner/drivers, free exercising (no need to pay for gyms). Office goers can do their evening shopping on the way back. There are many opportunities for ancillary industries as well, e.g. cycle repair shops, spare part shops and parking lots as already described above.
In management jargon, this is called a “win-win-win” situation!