Petrol Price: Austerity, anyone?
Petroleum companies should tell the public how they are going to improve efficiency and bring down costs instead of weeping about under-recoveries, and the governments should reduce their expenditure through greater efficiency. As Indira Gandhi said in 1970, austerity is the only way to go
It was soon after the first oil shock over 40 years ago, Indira Gandhi, who was prime minister, called upon the nation to use a lot less petrol and diesel and kerosene because the crude price had jumped five times or more. Austerity, she thundered, was the only way for the country to go.
A few days later she set up a stunt to show that she would lead by example. Instead of using her usual white Ambassador car, she went from her Safdarjung Road residence to Parliament House in a horse-drawn carriage which the president used on ceremonial occasions. And as her vehicle clip-clopped along, Indira, the master of showmanship did not look this way or that but buried her head in official files. All the newspapers carried huge, front page pictures.
The next day, Atal Behari Vajpayee, master at the art of puncturing opponents’ egos, produced his own version of austerity. He came to the Lok Sabha on a cart pulled by two bullocks. Vajpayee drove the cart himself, wearing a thin towel tied round his head, a whip in hand and clicking his tongue in classical style. Again, huge pictures on all front pages and a good laugh resounded around the country.
The next day Piloo Mody topped Indira and Vajpayee. Joint founder of the Swatantra Party, Mody was podgy and tall and must have topped the scales at 120 kilos. He came to the Lok Sabha—you must have guessed it—on a caparisoned elephant, howdah and all. Nationwide laughter once more and Indira’s petroleum austerity campaign lay down and expired with a whimper.
But now, austerity and efficiency in using petroleum products have become vital. India has been galloping well in the growth Derby: We cannot allow the champion horse to fall down and break a leg.
One fact has become clear. Consumption of petrol will continue to increase every year even if the fuel costs Rs100 a litre. And the same is true of petroleum products. Basic economic theory says that this should not happen: when the price goes up, demand should come down. But there is too much of money circulating in the economy. People will spend the extra money needed on petrol since they have to get to work and come back home. The public transport system is in a precarious condition. Put more pressure and it will break down. Cars and two wheelers are the only fairly comfortable means of commuting.
Therefore a strong campaign of austerity and efficiency is essential. Petroleum companies should tell the public how they are going to improve efficiency and bring down costs instead of weeping all the time about under-recoveries. And the governments should reduce their expenditure through greater efficiency and less leakages; they will then be able to reduce taxes on petroleum products and thus keep a lid on prices.
The Petroleum Conservation and Research Association of India (PCRA) keeps coming out with simple ways of reducing consumption. Here are some dealing with personal transport...
Delhi alone burns petrol/diesel worth Rs994 crore per annum at traffic red lights. Switch off your engine if you are going to spend more than 15 seconds at traffic red lights.
Drive your car at 45 kmph and save petrol up to 15% against driving at 65 kmph. If you drive at 80 kmph you burn 30% more petrol. Correct tyre pressure can save up to 10% fuel. Maximize the use of 5th gear. Driving in the correct gear prevents a 20% increase in fuel use. Regular engine tuning saves 6%. Clean your air filter regularly. Avoid frequent use of brakes.
There are other tips. Create car pools. Take a longer but less congested route. You burn 20% more fuel when using the air conditioner. Use the recommended grade of engine oil.
As Indira Gandhi said in 1970, austerity is the only way to go.
(R Vijayaraghavan has been a professional journalist for more than four decades, specialising in finance, business and politics. He conceived and helped to launch Business Line, the financial daily of The Hindu group. He can be contacted at email@example.com.)
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