The petrol subsidy must go.

Who is it helping the most? Large consumers of petrol. i.e. Ford Endeavour owners blasting the AC with a special power point for the computer. Or, people like my boss who drive a converted Merc van with a DVD player and a drinks cooler. These are not the people who need subsidies. These are the people that must be discouraged. A quick back of the envelope calculation reveals that petrol retails in India for $(3.78541178 * 54 /43) = $4.75 and change. This is second cheapest only after the great United States (outside of the major oil producing nations). It is a ridiculous number in a country where 99.3% of people DO NOT own cars. You might say that even motorcycles run on petrol to which I will say that the difference between 4-6 kpl in city traffic for a car and 60-70 kpl for a bike constitute two very different things in a family's budget. Or, one might sell three litres at the current price and everything above at exorbitant rates. A minor inconvenience for a biker - a major drag for car owners.

Indian oil companies are "weeks away from bankruptcy" (http://sify.com/finance/fullstory.php?id=14678154). Their failure will send cascading failures through the oil delivery system meaning that cooking gas, kerosene, diesel - the stuff that actually runs the country - might just become unavailable. This is hardly a price worth paying for the wellbeing of the chosen few.

More expensive petrol might actually allow the feedback mechanisms from peak oil to filter through to people's behaviour. Maybe if they drive less and we have less congestion on the roads, then we can possible even have decent standards of living in our cities. Perhaps revert some of that tarmac into basketball courts.

You can bet your ass that it is the country's car manufacturers who are "lobbying" for the maintenance of the status quo as regards petrol. They might as well not bother. As the rupee devalues against the dollar (a shocking occurence in its own right - possibly engineered by the textile and ITES companies), the price of petrol will put paid to their fancy advertising schemes and so on. Tata Nano might just become the "not-so-poor-man's-car" in the near future.

Look for more excitement on the energy front as the twin horsemen of inflation and supply constriction come riding out of the West.