[sustran] Re: Fuel prices and inflation

[ashok datar]

In countries with such high inequality- which is even more accentuated when
it comes to housing and transportation and between rural and urban , it is
important that food should not be unduly cheap because that is lower income
to poor farmers
true cost of land and fuel ( incl external costs) should reflect in the
pricing auto fuels as in case of most commodities.
if as a result of higher cost of fossil fuel- of which transportation is the
single largest user, it is time that the true and comprehensive costs should
reflect:

in higher prices of cooking gas ( with perhaps some amount from it to be
used for subsidizing solar systems for cooking and energy especially in
villages where space is less of a constraint)
similarly higher cost of petrol and even diesel will encourage less
concentration in cities with lesser use of private vehicle and more of
trains and buses and bicycles
so pricing is a part of a bigger paradigm
people will grow and buy local food
less long distance commuting
more rail usage for freight haulage ( as it consumes one tenth of diesel per
ton/km
this should be coupled wth more usage of internet as is being done as a
policy by south korea where more and more work is done thru net rather than
physical travelling

true costs include external costs to the whole society incl pollution and of
non renewalble

ashok datar
On Sat, Sep 24, 2011 at 8:06 AM, Rutul Joshi <joshirutul at yahoo.co.in> wrote:

> Hi all,
>
>
> I have a query - probably a naive one.
>
>
> Every time there is a fuel price hike in India, the complete hoax
> starts doing rounds on the social-networking site about 'how fuel is
> cheaper in other countries in Asia?' and 'how this rise in fuel prices
> is going to affect the economic growth'. The argument put forward by the
> middle-class and their friendly media is the links between the fuel
> cost and inflation leading to price-rise in the food items and the
> shrinking of the food basket of the poor people. Some other people (in
> ultra-minority) argue that it is just middle-class propaganda to shield
> themselves in the name of the poor. However, I don't know how valid or
> in-valid these arguments are. Intuitively, I am with the second group
> but I don't really have stronger basis for it. Can some of you who know
> these issues in detail, throw light on the same?
>
> Thanks,
> Rutul
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-- 
Ashok R.Datar
Mumbai Environmental Social Network
20 Madhavi, Makarand Society, S.V.S.Marg, Mahim-400 016
98676 65107/0222 444 9212 see our website : www.mesn.org

* I hear, then I forget.  I see, then I remember. I do, then I understand.*