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Another Fuel Price Increase?

  • The issue with the renewable energy business, like the infotech and telecom business, is that it does not lend itself to the business of patronage, power and pelf because the product is not really getting moved around physically. At the core of the issue on why we will continue to suffer from the after-shocks of fuel price increases is this reality. Enough with the burning of effigies; time to demand renewable energy solutions as part of electoral promises—and time to make it an electoral issue too

  • It appears that we are hurtling towards another increase in the price of petrol and diesel, by about 6% or more this time, and the delay in this spring present to us is only due to the ongoing elections in some parts of the country. As always, the government and the rest of the entities involved, which includes not just the government of the day but also the opposition and the other arms of power in this country, will blame this hike on the increase of crude oil prices globally.

  • But is that really true, are we missing the woods for the trees, by conveniently blaming circumstances beyond our control? Fact is, corruption in the business of fossil fuels used in India is now so immense, that if even a small percentage of this could be controlled, we could easily see a drop in overall prices of many consequential expenses borne by consumers, rather than suffer an increase.

  • Here are some major leakages and let us admit facts—the beneficiaries are not only the people from the ruling parties and their cohorts. Across the board, the open loot in this business is now not just costing you and me more than it should, but is also being done with the finesse of somebody hitting you and me on the head and forcing us to pay “or else”. Today, even if you are not a direct consumer of petroleum products like petrol, diesel, cooking gas or similar, your expenses are going to shoot up. That is a reality.

  • So, even if you and I were able to reduce our own personal expenses on petrol, diesel, cooking oil and coal (as some of us have done, to some extent), we would still face an increase in our cost of living. Stop travelling, stop cooking, and stop using electricity— still your cost of living will keep shooting up.

  • Some of the reasons, and the probable costs, are listed below:

  • 1) The absolute criminal delay in taking forward the Jawaharlal Nehru Solar Mission. On a national level, which has nothing to do with foreign hands or international factors, people close to the subject are already calling the lack of progress there, motivated by interested parties bound to ensure it does not work, as “the kiss of death”. So, we all wait for policy matters, and meanwhile our cost of living goes up.

  • On a macro level, it appears that politics on a national level cannot stand the progress made on this subject in Gujarat, Rajasthan, Bihar and Karnataka, since these are largely “non-UPA” government states. As a result, in what appears to be a “bite-your-nose-to-spite-your-face” kind of approach, other states which are from the UPA fold have not even got a solar policy as yet, leave alone a framework or a plan.

  • Probable cause: The biggest issue here is that the liquid fuel lobby, along with the coal lobby, knows that their huge investments and profits will be impacted if renewable energy succeeds as it is doing in Gujarat. The interesting factoid here is that the huge ports set up in Gujarat are doing great business—providing coal and oil linkages to other states, while Gujarat races ahead in solar solutions. Including, in the latest, even using the tops of their irrigation and sewage canals for solar panels, thus covering the sewage and also reducing evaporation of water in the irrigation canals. And they are going to use the sewage for more energy.

  • 2) The continuing delay in implementing the grid-linked options for renewable energy generated on the micro level, especially in the urban and semi-urban locations, despite repeated pronouncements to that effect. This is the simplest approach, where the investment is done by the individual concerned, and the government only provides access to feed power generated back into the grid. The saving for the individual is that she does not have to invest in batteries for storage. The saving for the authorities is enormous—investments, capacity generation, transmission, pollution and more.

  • Even a roof of 15 sq metre size, which is equal to the size of the awning under which you and I park our small cars, would generate enough energy, around 200 units of power a month, by reasonable calculations of only 18 sunny days per month. In most civilised countries, the power credit given for this is between 2x and 3x of power fed back into grid, so even if India takes the lower limit, that's a credit of 400 units per month to you and me. That’s half our average power bill for a 2.5 BHK home in Delhi with an air-conditioner.

  • One can probably see the long and powerful hands of the utilities and companies that handle the business of power distribution and billing—both private and state players—in this. The technology for metering and billing of power generated as well as credits into power consumed is simpler than the technology for issuing railway tickets, operating ATMs or generating golf club bills. (An attempt to do this, using the inverter batteries as storage, could lead to prosecution for generation of power without permission, I was told, and that could mean my electricity would be disconnected.)

  • 3) Usage of base non-biodegradable old generation plastics increasingly for non-essential packaging is another reason for high growth in petroleum product imports and appears to be reaching new heights everyday. Just visit any store and see how plastic packaging has overtaken every other form of packaging, regardless of whether it is suitable for the product concerned or not.

  • The good part here is that the older and modern options are making a re-appearance on cost basis again. Soft drinks in glass bottles, more and more ready-to-eat or drink foods in tetra-packs or laminates which are made of new-age technologies using traditional materials like jute or other natural fibres, a return to ‘kullads’ and other earthenware for tea and coffee at railway stations and bus-terminals, and also disposable plates made of leaves.

  • The lobbies at work here are, obviously, those in the packaging business. Here we shall have to, as consumers, vote with our wallets—and seek as well as pay for non-plastic options. Why, after all, should potato chips or instant noodle not be sold in paper or cardboard packets? Or why should whole trains and buildings be covered in vinyl wraps for hoardings and advertisements?

  • 4) The cost of transporting and storing petroleum products, crude oils and coal by various methods is another factor which increases costs for us as consumers. The inefficiency in cost of chartering ships, movements from refineries to ships and vice-versa, storage as well as loss by way of theft would be a national scandal if the correct figures were ever revealed. Unfortunately, in the interests of energy security, these truths and numbers seldom see the light of day. On many internal/domestic routes, where pipelines and inland waterways would provide a far cheaper and safer way of transporting these valuable resources, we see fleets of trucks careening across roads which are already in bad shape—and made worse by overloaded lorries. Likewise our over-stretched rail network. Moving these products by water or pipeline would cost a fraction and reduce pilferage by a very large amount.

  • But it doesn’t happen, so we pay higher tolls for the repair of damaged roads, we pay higher linkage charges equalised for inland destinations even if we live on the coast, and most of all—we pay the price of fuel adulterated en route when moving by tanker truck or train—it is like going across the country with a suitcase full of currency notes, left open on the roof of a bus.

  • Luckily inland waterways, especially in the high-growth Gangetic belt, are catching up as far as coal is concerned. But a lot needs still be done in the rest of the country. India already has the ship-building capability for such vessels, but it is the old bugbear, regulations, which come in the way. And these regulations against inland waterways come from the same ministry—which also holds the brief for road transport. The solution is the problem, so to say, and meanwhile the road transport lobbies hold sway.

  • 5) Wastage of these scarce national resources, fuels of all sorts, by those who govern us are now reaching a point of arrogance and outright blatant corruption of the sort we would associate with tinpot dictators in their little fiefdoms. The only thing is, these little tinpot dictators exist as chairmen and managing directors of these vast public sector empires in the energy business and they are the ones who are stealing from our pockets—blatantly and shamelessly.

  • So, we have public sector oil companies providing thousands of crores of loans to private airlines like Kingfisher, sponsoring golf tournaments to the tune of hundreds of crores to pander to the ego of their directors, wasting hundreds of crores of fuel and advertising for motorsports, using film stars and cricketers for endorsements, again costing hundreds of crores and as for expenses on everything but the business of fuel conservation—just check out any five-star hotel in any town and see who the biggest customers are for seminars and conferences.

  • In addition, if these oil companies just started thinking like energy companies and started with renewable energy options for lighting and HVAC within their own offices and campuses, we would have made a great start by now. However, the approach is that of the old-day petroleum oilmen get a free resource out of the ground and sell it for as much as you can. Nowhere else in the world, not even in the Arab countries are oil companies thinking like this as they re-invent themselves as energy companies. Except in India.

  • 6) And finally, leading from in front. Almost a decade ago, our great president with a vision, the quote-a-minute Abdul Kalam, had said that he would turn Rashtrapati Bhavan into an energy neutral palace. Far from it, the consumption of power in the whole South Block/North Block/Rashtrapati Bhavan has only doubled, from what sources say—because of higher needs of air-conditioning in summer and heating in winter. Blame climate change for this.

  • But that is not all. We have a political system where the allotment of a petrol pump, coal dump or gas agency is still the ultimate form of patronage, after land of course, then this in turn creates its own dynamics of the perpetuate fossil fuels sort. Every political leader I have ever met manages to generate a fair amount of his or her funds from the energy business through these connections. Why would they want to see this stop?

  • The issue with the renewable energy business, like the infotech and telecom business before it is that it does not lend itself to the business of patronage, power and pelf because the product is not really getting moved around physically. At the core of the issue on why we will continue to suffer from the after-shocks of fuel price increases is this reality.

  • That our cost of living for everything is going to go up dramatically every time the cost of fuel goes up is a given fact. But so much could be saved for the common good and individual benefit, if some simple methods were adopted by those who are supposed to try and make life more reasonable for the rest of us.

  • We need to stand up and demand this. Now. An increase in fuel prices is not some sort of default option which can be used to punch us silly every now and then, whenever an international incident jerks things around. Enough with the burning of effigies, already, time to demand renewable energy solutions as part of electoral promises—and time to make it an electoral issue too.

  • (Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved actively in helping small and midsize family-run businesses re-invent themselves. Mr Malik had a career in the Merchant Navy which he left in 1983, qualifications in ship-broking and chartering, a love for travel, and an active participation in print and electronic media as an alternate core competency, all these and more.)

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