Black benefits

Black benefits
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First Published: Tue, Mar 25 2008. 12 18 AM IST
Updated: Tue, Mar 25 2008. 12 18 AM IST
It is a tall order to ask the government to admit to its own follies—but that’s what a new public interest litigation has led the Delhi high court to do. It has asked the petroleum ministry and state-led oil marketing firm Indian Oil Corp. Ltd to file a report on the “alleged” black marketing of LPG cylinders.
The question to ask is: Who does the subsidized pricing of this mass consumption item—a political touch-me-not—benefit? Forget the poorest of the poor, a typical urban slum resident with no official LPG connection lands up paying nearly double and that’s for a half full cylinder—yes, in black. Meanwhile, higher pricing for the commercial sector, including roadside dhabas, leaves ample scope for arbitrage. And the middle-class consumer, who can well pay true?market prices, suffers an artificially created scarcity.
There are two reasons for that. As they can’t recover costs, producers have little incentive to produce. And with retailing limited to the public sector-dealer?network, the dealers, often awardees of political patronage, have little reason to fear.
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First Published: Tue, Mar 25 2008. 12 18 AM IST