BackFuel-lit fire
On the after-effects of perverse fuel pricing policies becoming all too visible
Premium(Mint)
The after-effects of perverse fuel pricing policies are now only too visible. The government on Saturday announced a 1.40 per litre increase in the price of diesel for bulk consumers. The first such consumer to be hit directly will be Indian Railways. Last week, railway minister Pawan Kumar Bansal had announced a passing through of fuel price increases to consumers—for now limited to the goods segment.
In theory, this step will help the railways by gaining some financial strength. In reality, given the already high freight rates, the danger of consumers switching from railways to road transport is very real. This situation would not have arisen had the railways not relied so extensively on its freight business to subsidize the dirt-cheap passenger travel segment. If only to prevent such a thing coming to pass in the future, the fuel cost pass-through must be effected for passenger travel as well, and immediately.
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