Why free pricing of petroleum products is good for the nation.

There is lots of debate going on should govt increase the duty on the petroleum products. here are few points which justify the price decontrol.

1.Prevents government from spending the amount which it is doing for oil subsidies on more productive ways like planned expenditure to promote education and health care.
2.The subsidy is not reaching the targeted customers. It is enjoyed by the people who drives a merc even though he can afford to pay higher prices.
3.It prevents the economical usage of fuel and major road block in promoting the usage and improvement of public transport.
4.It has a very bad impact on the health of OMCs and preventing private players to come in which prevents the healthy competition in this field.
5.Subsidy is enjoyed on LPG by everyone even if we can afford to pay actual price. The same LPG cylinders are used by restaurant owner, even though govt has released new cylinders for commercial usage.
6.Extra money we pay for fuel usage is very affordable to the income group. For a two wheeler user it comes somewhere about 150 INR/Month and for a car user around 1000 INR/Month. Car owners who drive diesel vehicles, including Sports Utility Vehicles (SUVs), should be able to bear the additional cost. There is no economic or social reason to subsidize them.

7.The burden of diesel price increase on agriculture depends on where it is used. In 2008-09, 12 % of total diesel went to agriculture (i.e., to tractors, thrashers, tillers, harvesters, pump sets etc.). The cost of diesel in agriculture would be accounted for by the Government while fixing the Minimum Support Price (MSP) for major crops. Therefore, any increase in the cost of diesel will be reflected in the price and will not adversely affect farmers. However, those who use diesel relatively more may not get fully compensated by MSP. Higher diesel price will induce them to use less diesel which may reduce over-use of ground water prevalent in many parts of the country.
8.Trucks and LCVs consume around 40% of diesel. It is reported that with industrial
revival and higher economic growth, the truck owners generally raise their rentals in consonance with growth. Higher diesel price would encourage fuel use efficiency as well as greater use of railways for freight movement. Railways consume around 1/4th as much diesel per net tone kilometer as trucks.
9. Large price difference between PDS kerosene and diesel is an incentive to divert
kerosene to adulterate diesel. Estimates suggest 35% or more of PDS kerosene is diverted for unauthorized purposes including adulteration. A consequence of this diversion is that the more than Rs.20000 crore of investment in producing Euro III and Euro IV diesel would be negated to large extent if diesel continues to get adulterated by kerosene.
10. The LPG-consuming households in the top 3 decile in urban areas, comprising some 22 million households, use nearly 40 per cent of LPG and spend less than 5 per cent of their total expenditure. These households get a large part of the subsidy even when they have the capacity to pay the market price for LPG and will use LPG even when the price is raised. Since providing universal subsidy through price below the cost misdirects the subsidy to the relatively affluent, a strong case can be made for subsidizing LPG as a clean cooking fuel for the poor. If the poor are to be subsidized, we need an effective mechanism to provide the subsidy.

Arguments why should govt control the fuel pricing
1.Kerosene the fuel which is used by low income masses for lighting and cooking purpose and price rise will make it unaffordable for them.
2.To promote usage of clean cooking fuel like LPG, CNG in Rural and low income group against biomass and firewood. Firewood has many environmental and health hazards. Moreover, the task of gathering these fuels keeps girls away from schools.