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Remembering Indira Sivasailam... Whistle-Stop Tour of Raghuram Rajan Reliance’s TV – 18 ready to launch Tamil News Channel Shipping woes of Chennai companies Land reclamation from sea appears cheaper! He continues the focus on social amelioration Fortune for Indian Airlines Noble nonagenarians... Editor's Notes CSR and CMI: promise of another Srinivasan Ramanujan... TIAM turns a full cycle The Gulf aviation boom Tihar, Puzhal not different from Parappana Agrahara Valli, they are more marginalised Muffled voices for merit… Bihar elections - the Rajaji formula worked London, London Narayan Medical costs hit the roof... Robber barons everywhere Naidu’s return augurs well for Seemandhra Should we change the official year? The few handicaps... The brown list of Venkitaramanan Increasing non co-operation of state leaders All eyes on Sankara Nethralaya L&T- the specialty of special purpose vehicles Music happens Marketing expert Balagopal is no more F C Kohli - his concerns all embracing Make standards certification mandatory... Boy, can you beat these? No engine for this car A think tank for Chennai Cement prices continue to rise… Welcome GST Delhi Chalo... Pharma – overdose of copying Welcome changes that testify to Jayalalithaa’s return to health PPP mode for upgrading Corporation Hospitals Road development slows down A friendly business group Nuclear power at the nucleus Fall in crude prices help in oil sector reform Polls and promises Sri Lanka votes for change Padma Bhushan for A Ramakrishna TGS- The king storyteller Wanted: a second airport for Chennai Shaming of Tamils by Tamil farmers at Delhi Towards speedy justice L&T: focus on infrastructure and more infrastructure… IPL - no surprise this scam A more liberated TN… Tatas moving out of urea production... Liberal imports idling indigenous capacities Cleaning Ganga – relocate tanneries and install electric crematoria Permanent secretariat for TN GIM Kudos to NDTV... Online not in line with brick and mortar businesses... When the President was rendered homeless… Another Indian music maestro at the UN Delhi returns to BJP IPL type auction for VCs? 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Air Asia India will set new benchmarks for budget travel Modi and the lady EEC at the National Media Centre Eternal support for capitalisation of PS banks When nations steal growth from one another… Quality education through the PPP mode Infrastructure funding – lessons learnt Small units prefers to remain small... Sweet news for TN sugar mills Measuring roof tops in terms of KW/MW TELANGANA at last…BUT Chennai and Kolkata miss opportunity to grow as Delhi and Mumbai An enemy’s enemy is a friend The star of Spencers is no more Secularism and anti-Hinduism to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines Things happen by accident and not by design... IAS invades NDDB... Rahman at CIC More Shakthi to Das’ elbow Multi-faceted Venkat Why this malaise in medical education? Welcome focus on core competence Readers' Mail A professional at the helm of IRDA... EVM is tamper-proof The rise and rise of KCP Mersal magnified Making ‘my Amaravati’... A Grand Finale for SN’s MS centenary at the US… …and of a popular trade leader More Shakti to resource mobilisation... Alexa – Talking Wikipedia A proud Madrasi Delhi is distant… A C Muthiah – his munificent bequeaths to science TN accounts for the largest recruits by the IT sector Where a state respects its litterateurs… R Sridhar steps down as CEO of Shriram Capital B H Kothari - a tribute For whom the bell tolls? When online building permits work…. TN-leverage strength of BHEL, NLC... Tribute Mu Sigma – is no more Auto components surge… Like Hinduism: many paths to reach God... Fuel for thought Banning booze... Where is Rajaji? Vibrant Gujarat Naidu will soon build a new Hyderabad Strengthen the base... Come elections, come advertisements... An inexplicable neglect Solar, solar everywhere … Telangana in top gear… Welcome thrust on trade in Modi’s foreign visits... Scientists urged to take up farmer-oriented research Odisha: spectacular win by Naveen Patnaik S Ramanathan – a versatile musician, musicologist Why land prices zoom in TN? No Maha Koottani in TN... Airlines in India: cost and space A yen for wastage… A rich pool of talent not utilised…. The ‘Ayyo-yes’ is no more MHC should not return to its old indisciplined ways Paytm karo... A Grand Finale for SN’s MS centenary at the US… More tributes to GR West Bengal: mindless malignancy Put expensive assets created to use... Revive development banks... 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Fuel for thought

I find an interesting contrast. The average American adjusts with ease and equanimity to wild fluctuations in the price of gasoline. The average Indian finds it difficult.

Petrol prices in the US have always been lower than most countries in Asia and Europe. When crude prices shot up a few years ago to more than $ 4 per American gallon (3.75 litres), there was a lot of grumbling, but there was also resignation to the fact that prices were market driven.  So people adjusted their lifestyles – they moved away from larger sports utility vehicles (SUVs) to smaller cars; hybrid cars saw massive increase in sales, people cut back on driving vacations, etc.

Since 2014, when crude prices crashed, petrol prices dropped to as low as $ 1.35 per gallon; with exchange rate of Rs 68 per US dollar. This meant that petrol was available for just around Rs 25 per litre through 2014 and 2015. People went back to buying larger vehicles, and hybrid sales growth slowed. In my current visit to the US, I notice the price shooting up to $ 2.75 per gallon. This translates to Rs 49 per litre! The average American has taken this doubling of price in a year in his stride.

In India the contrast was stark. Successive governments at the Centre have been struggling to cope with the huge increase in crude prices. The Vajpayee government attempted to move away from the administered price for petroleum products in 2002. The then Petroleum Minister, Ram Naik, told journalists at the Economic Editors Conference that the regime of controls would be over. On that promise, Reliance Industries, Essar, Shell and ONGC entered petroleum marketing through hundreds of retail outlets. The three private companies also set up a good number of petrol/diesel dispensing stations across the country. These, in fact, were different from the dilapidated and often depressing outlets of the public sector oil marketing companies of Indian Oil, Hindustan Petroleum and Bharat Petroleum. In fact, the glittering and clean appearances of the new entrants triggered the change on the part of public sector outlets as well.

The frequent and significant increase in crude prices, along with the resistance on the part of average consumers, continued to challenge government’s attempts to rationalise pricing. Thus, successive governments, including the NDA and UPA found it extremely hard to adjust petrol and diesel prices to cost. Along with LPG prices, diesel and kerosene prices were kept under control. Only the price of petrol was deregulated and this resulted in petrol prices shooting up to around Rs 78 per litre in retail.

The Modi government was incredibly lucky in crude prices crashing to little over Rs 30 per barrel through 2014. This made it possible for the government to dispense with price control on diesel. It also took bold to dispense with the old system of huge subsidisation of LPG. The Aadhaar platform was used along with the Dhan platform to deliver subsidy directly to the beneficiary. In that process, the government was able to eliminate a large number of bogus claimants. And the appeal of the prime minister also helped to wean a good number of the haves away from the subsidy.

The government also adjusted the excise duty on diesel and petrol upwards to benefit out of the fall in crude prices. Thus the full effect of the decline in crude prices has not been transferred to the consumers. This was necessary to bolster up the revenues of the Central government at a time when industrial growth was sluggish and corresponding revenue growth was not to expectations.

When the price of crude increased from a low of around $ 30 to more than $ 50 per barrel, the retail prices of petrol and diesel inevitably increased. Oil marketing companies adjust these prices periodically, and the consumers and several state governments have been voicing their protest.

One is thus able to see the contrast – the ease with which the US has been able to adjust to variations in the price of crude and its absence in India. State governments that run a large fleet of public transport, find it difficult to increase fares in tandem with rise in the price of diesel. Thus, they protest vociferously over the continuous and sizeable increase in the price of diesel. It needs a lot more efforts to explain the why of these fluctuations. Unfortunately, policy makers in the centre are not quite capable of doing this.

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