02 March 2010

Fuel prices again

The Budget presentation saw the opposition walk out of the Parliament for the first time in India's history. This was over the government's raising fuel prices by increasing duties.
There are a number of problems with the fuel pricing policy in the country, see this article on the 'dieselisation' of the economy thanks to differential pricing.
For the long term view, though there appears to be little alternative to rational pricing. Suyodh's piece in the Express explains
We cannot run away from reality: we are talking here about pricing non-renewable natural resources. Feynman had once said: “for a successful technology, reality must take precedence over public relations, for Nature cannot be fooled.” The technology that has been built upon fossil fuel-based energy has to be transformed. The only way the market will do that is if it is confronted with higher prices.:

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