[sustran] Re: fwd - Fuel riots in Nigeria

[Debi Goenka]

The issue of fuel subsidies is indeed difficult.
In India, we have a differential pricing mechanism (prices
in brackets in Indian Rupees per litre) for different
petroleum products such as petrol (29), diesel (17),
kerosene (6), naphtha(11), etc.
Kerosene is subsidised on the ground that it is a poor man's
fuel - however, a significant amount of kerosene is sold
illegally for industrial/commercial use or used for
adulteration of petrol/diesel.
However, at long last, the Government of India seems to be
moving towards rationalising all the petroleum prices and
bringing them on par to international levels. This will
however be done gradually in phases rather than any drastic
increase or decrease. 
The bottom line is that any subsidy or excessive taxation of
a product leads to problems. The differential between diesel
and petrol prices has, for example, led to an artificial
demand for private diesel vehicles over petrol equivalents.
Cheers
Debi Goenka