ibnlive » Chat

4 pm Jan 18, 2013

Impact of diesel price rise on daily life of an Indian

How is the diesel price rise likely to affect the daily life of a common Indian? Talk to CNBC-TV18's economic policy editor & Delhi bureau chief Siddharth Zarabi to find out.
13 questions answered
  • Kejriwal accused that companies like Reliance which have procured oil fields like KG Basin are not interested in increasing oil production but are hoarding oil and forcing govt to raise prices 2$ to 14$ which is against national interest so how much is corporate blackmailing responsible for fall in production Asked by: Ravi
  • Siddharth Zarabi The argument is more technical and cannot be seen as only an emotional debate. There are reasons that have been expressed by the developer regarding field status and the government seems to have accepted them.
  • Is there a way of managing costs of oil production and distribution without increasing cost to end customer? I am sure there are some best practices in other countries. Asked by: gopalan
  • Siddharth Zarabi It is a fact that oil marketing companies need to increase efficiencies and keep costs in check. Diversion of K-Oil and LPG as well as diesel is a concern that needs to be addressed.
  • Why is the govt through committees of Rangarajan, Montek and Kelkar try to fleece public by raising prices as these people have only bureaucracy experience and no experience in oil and gas so govt should take some help from oil experts to raise productivity rather than increasing prices. Asked by: Hitesh
  • Siddharth Zarabi strong words, but there is need for expert advice.
  • Govt is saying that Rs 10 increase will offset the subsidy on diesel but in case prices are increased Govt is going to find some other scape goat for its inefficiency and will not sort out issues of corruption and corporate benovelance which are adversely effecting the country. Asked by: Manush
  • Siddharth Zarabi as we discussed, higher efficiencies are an absolute must.
  • It is often seen that media is pushing for raise in prices by speculating on them weeks and sometimes months before they are done like in Delhi Metro where they are speculating price hike in June so is it in hand in gloves with Govt so is it not against principles of journalism that for news it is forcing govt to take action. Asked by: Manav
  • Siddharth Zarabi Journalism requires us to put out news as it is sourced and obtained, faster than everyone else.
  • DOes Diesel price hike directly proportional to hike in commodity prices. There are other factors that impact price rice. Many rich people drive diesel cars and pollute the environment as well. And deregulation is the way to go isnt it. What are ur views. Asked by: Narayan
  • Siddharth Zarabi good question. Diesel prices are a component of our wholesale price index. Any increase in the Fuel index of the WPI leads to an increase in the annual rate of inflation. Diesel usage is spread across sectors - Railways, Defence, Power, Telecom towers, Farm turbines and pumps, Land transport & other Industrial segments. The automotive segment - passenger cars - do not account for a huge part of diesel sales. Modern day diesel engine technology is not as polluting as earlier. Overseas, diesel is priced higher than motor spirit (petrol).
  • How will the price rise impact middle class society? Asked by: Jeril
  • Siddharth Zarabi as we discussed--there WILL be a passthrough of the diesel price hike on to customers across segments. If oil marketing companies gain Rs 12000 cr from the hikes, it can be assumed that producers and suppliers who have to pay more, will pass this cost on to end users.
  • In your what should be the stance of Govt Of India Economy or the populist policy decisions ahead of 1 year before the general election Asked by: Mitesh Desai
  • Siddharth Zarabi Populism does not necessarily win elections, as recent history has shown. Electorates are intelligent and these days would like to vote for clean, good governance.
  • Why is govt by throwing the excuse of subsidy hiding its misgovernance as other countries like US have been able to raise production through shale gas and shield its population Asked by: Arvind
  • Siddharth Zarabi you are right. The issue of lack of new exploration and oil, gas finds is a serious one and needs greater attention. Successive rounds of bids have seen tepid interest and more needs to be done in this regard.
  • The goverment expects RBI to cut repo rates for growth of economy and the RBI governer expects the government to rein the inflation. Don't you think resultantly the common man is suffering? Asked by: Shaym Vadalker
  • Siddharth Zarabi the inflation vs growth paradox is an interesting one. But it is a known fact that unless inflation is moderate, interest rates will be used a tool for tightening monetary supply.
  • Don't you think that the diesel price will see the inflation touching the sky? Asked by: Shaym Vadalker
  • Siddharth Zarabi the diesel price hike will have an impact of inflation, but the fiscal balance is also equally important.
  • Why does the govt not rein in those who are using fuel inefficiently like rich rather than victimising essential commodities by raising freight and transport fuel Asked by: Sanjay
  • Siddharth Zarabi Better targeting of subsidies should happen through measures like Aadhar and direct cash transfers.
  • Why is the govt unable to put pressure on oil companies to improve efficiencies, given that the price rise has such a widespread impact? Asked by: gopalan
  • Siddharth Zarabi Price rise is an issue that should be foremost in the governments mind, but we have seen only half serious administrative measures. Better agricultural productivity is one of the ways out of this difficult situation.

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Siddharth Zarabi
Economic Policy Editor & Delhi Bureau Chief, CNBC TV18