In his concluding remarks at the meeting of the Planning Commission on Tuesday, Prime Minister Manmohan Singh obliquely hinted at the need for a “rational energy policy”.
He has a very good case: A PTI report on Tuesday said three major oil marketing companies—Indian Oil Corp. Ltd (IOC), Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp. Ltd— stand to lose Rs44,274 crore in revenue this fiscal due to underpricing of oil products. IOC alone stands to lose Rs25,000 crore on this count.
On Tuesday, a barrel of Brent crude was trading at $69.50 (nearly Rs3,385) in New York. In the months to come, crude oil prices are likely to inch northwards. In that light, domestic oil prices should be revised now, if only to help these companies withstand future shocks.
Increasing oil prices also make environmental sense. The?transport?sector?consumes the bulk of oil and is a big contributor to carbon emissions in India. Taxing this consumption makes more sense than agreeing to some arbitrary emissions cut figure.