Monday, October 08, 2012

Try growing your LPG

A family outing was spoilt recently after we got into an argument about prices, economic policy and so on. It started with a comment made by Prime Minister Manmohan Singh, to explain the new LPG and diesel prices. He reportedly said that upping prices wouldn’t hurt the poor directly, since LPG wasn’t meant to be the poor man’s fuel anyway.

Which brought me to that awkward question — what is the poor man’s fuel?

I agree that LPG and even kerosene should not be subsidised. Subsidizing non-renewable fuels is the worst long-term policy we could invest in. But these fuels are getting too expensive even for the middle class. So what should the nation cook with? Wood?

Even at the cost of my lungs, say I was willing to use a wood-fired stove. Would I then be allowed to cut trees? But in general, people are not allowed to cut trees without permission.

An argument was put forward — the poor should be planting more trees, and then cutting them down for the wood. But that brought me to another question — what have the non-poor done to deserve petrol or LPG?

If the poor grow their own firewood, they probably have a right to it. But how will affluent citizens ‘grow’ the gas they consume? And if they cannot replace LPG, then why do we expect that the poor will replace any trees they cut down?

One could argue that it is not the poor who ‘discover’ coal or gas. Somebody invests money in locating it. Somebody else extracts it, refines it, delivers it to the market. Those who can afford it, buy it. If most of us can’t afford to buy fuel in the market, how can it be helped?

But then, who is to say who had the right to the fuel in the first place? Say, person X wants to acquire fuel and market it. The fuel sits inside a piece of land owned by a village, ABC. Here, people have a bit to eat, and most people have work of some kind. The village does not want to sell to X. So X goes to the government to ask for help. The government has been elected by the majority of the people, mostly villagers like ABC. But instead of siding with ABC, as it ought, the government sides with X. It buys up land from ABC at low prices, claiming it is doing so for overall ‘development’, and gives it to X to exploit as he will.

The process might create some jobs. Say, A finds work, but B and C don’t. In fact, A’s job might place him in conflict with B or C. The soil or water or air may get polluted to the point of causing health damage.

X sells fuel to Y, who sells it further to Z, who sells it to all citizens, including ABC, who buy it if they can afford it. X makes a profit, Y makes a profit, Z makes a profit. As for ABC… well, too bad, eh?

Chances are that ABC can neither buy LPG nor do they have enough land or water for their work to translate into loose cash. If they migrate to cities, they may not have space to grow trees for firewood. And if they plant on public land, how do they prove that such and such tree is their own and they are entitled to cut it down?

So, although I understand the need to stop fuel subsidies, it would be really nice if the Prime Minister spent some time thinking about this – what, exactly, is the poor man’s fuel?

First published here.


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Jack Cruz said...

Very interesting post. This must be shared to all. Good job my dear friend.

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Nice Blog and Nice Post...

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Sunil Deepak said...

If they are honest may be they would say "poor don't need to eat"?

Karan Aylawadi said...
This comment has been removed by the author.
Karan Aylawadi said...

I think its high time that we should re-elect a government every 3 years.. at-least they will achieve some of their targets in a fast-paced manner.. 10 years on the power seat has corrupted the government to peril

Anonymous said...

Subsidy is not good as it promotes black market.Even arindam chaudhry has spoken against it in one of his columns.

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