Is 2012 Petrol Hike Really Bad for India?

The recent petrol price hike by the Indian government has opened up a scale of reactions—anger, frustration and sarcasm at the Govt. for failure to control the fuel prices. The hike has affected a huge segment of Indian citizens directly or indirectly. However, a major share of rage has poured in from the middle-class in metros and tier-two cities that depend on personal vehicles for everyday commuting. The pain at the pump is real of corse, especially in context to the galloping inflation on household incomes.

global fuel priceAs compared to 2012 global fuel prices, the petrol hike in India is not as high as in some parts of the world. But the television screens across the country have been flooded with imagery of people railing against the government and opposition leaders demanding a rollback on the price hike. While some of the disappointment is understandable, I feel the bigger picture needs a ‘window on perspective’ for comparative rise in fuel prices globally.

Every crisis produces an opportunity like in the US they had an Apollo moment i.e. where President Kennedy challenged NASA in 1961 to send a rocket to the moon. I feel this might be India’s Apollo moment. This is the time for its leadership to finally push the button on going for alternative energy, promotion of two wheelers and safe public transportation.

India has also been pushing alternate energy resources for the country’s fuel needs. However, India needs to look at all the available options. Energy economists across the globe have started to admire oil companies in the US for developing shale gas resources on a larger scale in a short span of a decade. Shale gas is one such natural gas alternative produced from shale formations. The US gas supply has changed from one of deficit to surplus within a span of just two years. The sudden and unexpected development of shale gas could be a game changer if it is done after considering environmental challenges.

The price hike may also impact sale of cars and push the demand for motorcycles and scooters even higher. India being a country of youngsters, the government can also come with an incentive program for the youth and students and promote two-wheelers as an economical and greener transport option. The government should try to impact the younger generations by creating awareness on green travel options like e-bikes and solar-powered vehicles since informed generation of youth is probably going to be more environmentally conscious.

Traditionally, public transportation has not had much of an appeal to the middle class in India. The Delhi metro train service is a success story for different classes of society. It has changed the concept of commuting for the city dwellers given the quality and efficiency with which it connects the Delhi and NCR region via colored underground lines. Metros are cool and convenient for the young and old to hop onto and get to wherever they need to go. I understand that efforts are on in other metros like Mumbai, Chennai, Bangalore Hyderabad, Pune, Kochi etc. Given the current anger on fuel prices, making these metros operational should be treated with a greater sense of urgency as I am sure it will make traveling easier and more affordable for people in metros and two-tier cities of India.

The growing fuel prices though very painful might produce a turning point in the public in India towards other fuel options since dependency on foreign energy is not a long-term viable alternative for India. Thanks.

Sanjay Puri

This entry was posted in In the News, Personal and tagged , , , , , , . Bookmark the permalink.