The privatisation of petroleum industry

This is a response to one of the articles I read from my friend Mahesh’s blog. He was talking about the privatisation and its effects on petroleum industry. He felt that government should run the petroleum sector, as no private company will be willing to offer any subsidies to consumers.

However, I think there is a better way to do this. I hope there will not be any contradiction to the fact that it is competition that breeds efficiency. This article is an attempt to marry of the benefits of privatisation to the petroleum industry with all its volatile nature of prices. After all I would like to show-off all that I had learnt in my last semester’s economics course. Hope you will not mind this, Mahesh.

Let private companies take over the production and distribution of petro products. Once it is privatised the industry will search for its own levels of optimum and efficient performance. The government in areas of need can use the proceedings of disinvestments. Education and schools will be one of them.

Coming to the subsidy, with all my economics fundaes, I can suggest a method. It is like this. As with our electricity bills where we have a slab system, the price of fuel should be higher for higher consumption. To achieve the differential pricing, each consumer gets something like a petro-card, which is already existent with many companies. But this card is not to promote the consumption like the existent ones but to discourage consumption. Whenever you buy fuel at an outlet, you will need to present this card, which has a record of your consumption for the month. In effect, so to say, you have to use this card like an ATM card or a Credit card to buy fuel. Based upon your consumption you will be billed. You can get the first 50 litres, say at the present prices. But as your consumption increases the subsidy decreases and you will have to pay more for the next 50 litres. All these transactions recorded electronically will help the government to pay the differential. It will not only ease the pressure on government for equally subsidising those who really need petrol from those who are not in such a dire need, but also will lead to efforts in reducing unwanted consumption.

According to economics, each consumer has a certain price he is willing to pay for a product, which need not be the market price. Some are willing to pay more for the same item than others. This difference between the price/value consumer places on an item and its actual market price is called the consumer surplus. This current fixing of market prices will treat alike those with a higher and lower consumer surplus. Hence due the current scenario, consumers whose willingness to pay less than many others or those with less consumer surplus also get the same treatment as those with higher surplus. To put in common language, a teenager who wants to take joy rides on his automobile gets fuel at the same price as an employee who needs fuel for his daily commuting. Hence the government subsidises both people alike, it has to pay the same price of subsidy, both for the joy rides as well as for a well-needed journey. Once this differential pricing in place, it effectively discriminates between the two people and will restrain the teenager’s joy rides and save on fuel. It will also lead to higher value realisation of taxpayer’s money, which is used in this subsidy.

In places, which are electronically isolated, coupons can be used instead of cards for the same. Also there is no need to discriminate people in the tax slabs. Only differentiations needed may be among industrial and personal consumption, emergency and government services.

This is a crude plan and needs to be fine-tuned. Nevertheless, it will largely help the government and the economy by a reduction, not only in amount of subsidy, but also in the consumption of fuel.

Warning:Copyrighted material. For implementation and usage of ideas, contact "The Economist"- Sri Vallabha Deevi.

The assertive,the modest and the egoist

I discovered my ego, rather suddenly. Though I don’t know still, for sure, whether “ego” is good or bad. Before I made it to IITM, I never bothered about accusations various people made and corrections they suggested. Whenever someone would tell me that I made a mistake, I, in all my childishness, [traces of which are still present] would accept it. I would start thinking that it was, indeed a mistake and would try to imitate what people, whom I saw as role models did.

I would try to mould myself, batter down my feelings trying to emulate SOPs. [SOP: Standard operating procedure] To put it more clearly, SOPs are those traditions or practices followed and passed on generation to generation. I don’t question their wisdom. My only problem is being forced to follow it, even when it hurts me. To be true, I was well aware of this problem since my school days, but I never dared to complain. Whenever somebody punished me in school for some mistake, I would simply follow what I was told to do. But I still remember quite a few events, where I was not able to compromise and incurred the wrath of quite a few elders. It would take my father to explain me clearly what I was supposed to do, and me to half-heartedly mutter some apologies.

Let me tell you one thing before proceeding further. I am not an egomaniac. I have no problem with people trying to correct me and I will, most willingly accept suggestions. But there are a few fields or areas, where I pride myself (I may be wrong!) in being meticulous. I don’t have a ready list of these fields but technology and academics are certainly not among them. In fact I can get you testimonials from my friends telling how open I am with regard to academic suggestions. You come and tell me two twos are six and not four and I will start believing you.

After I entered the Insti, my most cherished place I started to understand how important it is to believe in oneself. I am in fact indebted to my Insti, my Profs and my friends for the self-confidence I acquired. I started to see things in a new light and I will remember the day I confronted one of my Profs in the class about an issue. I felt that my action was right and that my opinion mattered. So stood up and spoke while the rest of my classmates stared at me in surprise, for what seemed to most of them as an attack on the Prof itself. Of course, one thing why I like my Insti most is that people are able to differentiate an ideological difference from a personal confrontation. Later, not only did the Prof discuss the matter in detail but also became a good friend of mine. We stop and speak to each other whenever we meet.

The whole point of writing this blog is to tell you not about the past, but about the present. My worry is that these self-assertions are becoming more frequent. In the three years of my being in the Insti, I think it was only twice that my ego showed up and made me felt pricked. But it took hardly a month in this present place [I think you already know where I am. I refrain from mentioning because I feel that it is not good to brand a whole place for the actions of a few people] to trigger my ego, not once but twice.

The first was when one of the people I met here tried teaching me discipline. I met him one day as a part of my work and it didn’t take more that three minutes before he shouted, “ You should learn discipline first”. I didn’t reply, for, a brawl with an elderly man was the last thing I wanted. I withdrew but it pinched me so hard that I spent almost a half a day, figuring out what to do. I finally decided to mail him and wrote a long letter explaining him the consequences of trying to teach discipline to strangers. I made it cleat that I didn’t need any lessons from him and also made him understand what would have happened had I shot back at him. I met him again and asked him whether he read my mail. He grinned uncomfortably and replied “ no problem”. I understood that he lacked a reply and that was a satisfying moment.

The next one came yesterday, after a mid term presentation. One of the employees expressed dissatisfaction and asked me if I was satisfied with my work. Of course I realised that my presentation was short and terse, but couldn’t see any reason for the question. I don’t claim to be the most sincere at work, but I did my work with a considerable degree of involvement. It naturally irritated me and I replied, “ I am absolutely satisfied and I am sorry for you”. It took me whole of the evening to drain away the frustration and I flared up today morning when on my friends tried digging the matter up.

Now, here I am trying serious measures to bring down these flare-ups and be my old modest self again. By the way, suggestions are welcome.

My first salary.

Today, I received my first salary. A HDFC bank cheque attached to an A4 sheet, making an announcement

Pay Sri Vallabha Deevi an amount of ***** _

I filled the amount with ****, just because I wanted you to keep guessing. It is in fact a great one time experience, first salary. I am happy and want to shout at the top of my voice. Well friends, I lack words and so I stop.

A day I will remember for ever!

Mysore cafe

In about a week after coming here, I started to feel what it is like being away from home. [IITM has become a home away from home, to most of us.] With all that sweet curries and baked papads, the food in Insti mess seemed much better. The difference showed up, especially during breakfast. One day I had to eat aloo-paratha for breakfast and I felt terrible.

I never understood when my Northie friends in Insti were grumbling in the mess about the food. The menu always had something in common to what I ate at home. Breakfast was mostly idly, dosa, pongal or in the least pesarattu which I would eat at home occasionally if not regularly. But I started eating aloo-paratha only in IITM, on Sunday nights in the mess, that it made me feel terrible when I had to eat it for breakfast in Surat. And this with something that tasted like curd, early in the morning made a deadly combo. [Combo= combination, caught the usage very recently from my IITB friends here.] The alternative was bread, which I felt was no better. So, it was a memorable day when I ate aloo-paratha with curd for a breakfast.

After that my heart started longing for dosa. Though I am not very particular about food, when the means were well within my reach I felt no problem in going for it. To put it clearly, if I have to live on aloo-paratha I will. But when I can search out a south-Indian hotel and eat a dosa, I found no point in not doing it. Thus started one of my most exciting searches, one that showed me a major portion of the city/town and gave me an idea of Surti (Surti= belonging to, or of Surat) way of life.

It would almost be seven by the time I came home on weekdays and being exhausted, I wouldn’t attempt to go out for a search. I have to work six days a week and hence Sunday was the only day when I could go out and search. On the first Sunday, I started of with my friend in search of malls and shopping complexes, just to wile away time. Subconsciously I was searching for any hotel that would offer south-Indian cuisine. I saw Parle-point, a small junction in Surat that had a model of Eiffel tower standing at its centre, then Athwa lines, where there was a model aeroplane standing in a small circle at the junction. Peculiar idea I thought! At all junctions and circles the city sported some or another curiosity. At some other place was a ship, while yet another contained the frame of a woman holding a basket. These are not exactly statues but things made out of iron frames. The first search was futile, as I couldn’t find any south-Indian restaurant.

The second Sunday I marched all along Ghod-dood road, with the hope of finding the place I was searching for. Two hours spent to no avail. All I could find was pizzerias and chat bhandars where people were eating something or the other for break fast. I came back exhausted, filled my stomach with a packet of chips and a fruit juice. I came to a conclusion that Surat doesn’t have any south Indian restaurants and the thought sickened me. And the worst part of it was that dosa was the breakfast at the mess, which I unknowingly skipped in search of it. That evening, having heard that a restaurant called “Bombay bites” offered south-Indian cuisine; I went there hopefully to lay my hands on a dosa. Imagine my disappointment when the proprietor told me “ We used to have that sir, but we scrapped it a few months ago.”

Now, having met with bad luck both times, I started using whatever brains I had. Some of the employees that work with me here in RIL are from south and hence I started enquiring about south-Indian restaurants. To my relief, they guided me to a one near by, one that I have overlooked in my previous searches, Mysore café. It is just 4km away and there I could have all the south-Indian dishes, I was told.

I didn’t wait any longer and finally on a rainy evening made it to Mysore café. I will cherish that moment forever, the moment I ate a plain dosa with coconut chutney and sambar in Surat. A coffee that tasted just like another coffee at Saravana Bhavan gave the day a perfect ending. Since then Mysore café, Athwa Lines, Surat became my place of pilgrimage.