Friday, September 02, 2005

$3.00 a gallon petrol...

When I was in the southern US last year, oil was touching $2 a gallon and consumers were cribbing. Today, with gasoline touching $3 plus a gallon thanks to the impact of Hurricane Katrina, people are going ballistic. If people think the war in Iraq was about oil, why have oil prices in the US been climbing steadily higher ever since the war began. No wait, I forgot no-one is producing any oil in the US. The last issue of The Economist had a cover called 'The Oilaholics' parodying the US and China, but really how much can you blame the big Humvee's for the increased oil consumption of the US? While the media might be doing a Mani Shankar Aiyer ki jai, the man is going to start facing the music very soon as the US and China move to protect their energy resources and with the evil communists determined on bankrupting our Petroleum majors, India is screwing whatever chances it had for energy security. Unless we start assuming that Mukesh Ambani will come to the rescue, because this Aiyar-Raha-Mittal plot is being outfoxed by the Chinese. Anyway even at $3 oil, the average american still pays less than an Indian for petrol. A gallon is 3.79 litres of fuel which means that in the US of A, unless you live in California, you pay only Rs 35.03 per litre of petrol. Now, that includes the oil companies profits. Actually, in India you do really pay less that the average American for fuel, but taxes make up the difference and we end up paying some Rs 43 for premium fuel in Delhi. And the oil majors make no money, because the evil communists as I mentioned earlier are determined to bankrupt the oil majors for the sake of the non-existant common man - half the subsidised kerosene in India still ends up adultrating diesel and petrol and producing pollution, but do the evil commies care that their 'common man's' lungs are being chocked with suspened particulate matter? Nope, they'll live in their mansions (or brother-in-law's mansion as is the case of the Commie big-boss in India) and keep on instructing this hare-brained government to do their bidding. Now hare-brained government can't cut fuel taxes because they have to fund their hare-brained Rural Employment Gurantee scheme, which is throwing yours and my tax money down the drain.
While I agree that a fuel price increase will hurt me, not increasing fuel prices will hurt the economy. Sure, truckers will come out on the streets and protest at price increases, but they should be thankful that they don't live in Europe and pay 1.5 Euro per litre of fuel (Rs 80 plus). Of course, if fuel prices go up, inflation will go up and the economic party might go slow, but if ANY of the oil majors collapse, the economic party will surely end and the scare is that we might revert back to a era of Nehruvian mis-economics. I'm willing to pay Rs 50 plus for a litre of fuel and understand that the era of cheap fuel is over. Of course, this means that media barons also need to understand that the era of cheap journalists is also over!
EDIT: Talking about New Orleans, the New York Times has some amazing pictures of the floods, and as Papamali mentions on his blog, the incidents of the past few days appear in stark contrast to the events of 26/7 in Bombay. Bombay, was brought to its knees but there was no looting, the people held together even though the government did virtually nothing for a few days. It almost makes you wonder which is a first-world city. The Big Mango sure did a lot better than the Big Easy, even though thousands of people had their lives disrupted here as well.
And never has a particular song by one of my favourite bands seemed so wildly appropriate.
If it keeps on rainin’, levee’s goin’ to break,
If it keeps on rainin’, levee’s goin’ to break,
When the levee breaks I’ll have no place to stay.
Mean old levee taught me to weep and moan,
Lord, mean old levee taught me to weep and moan,
Got what it takes to make a mountain man leave his home,
Oh, well, oh, well, oh, well.
Don’t it make you feel bad
When you’re tryin’ to find your way home,
You don’t know which way to go?
If you’re goin’ down south
They go no work to do,
If you don’t know about chicago.
Cryin’ won’t help you, prayin’ won’t do you no good,
Now, cryin’ won’t help you, prayin’ won’t do you no good,
When the levee breaks, mama, you got to move.
All last night sat on the levee and moaned,
All last night sat on the levee and moaned,
Thinkin’ ’bout me baby and my happy home.
Going, go’n’ to chicago,
Go’n’ to chicago,
Sorry but I can’t take you.
Going down, going down now, going down.
OK, so they're all going to Houston instead.

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