Thursday, April 09, 2015

Cooking it up

I was watching the news. A very erudite-looking gentleman from Calcutta was polled by a journalist - asking him whether he would voluntarily give up his LPG subsidy (something the government has recently been exhorting all financially capable Indians to do). With an air of know-it-all conceit, this person goes on to say that he most definitely would not give up his subsidy - because, "Crude prices have fallen so much. At current levels, an LPG cylinder should cost Rs200, not Rs450."

It amuses me no end when such pseudo-intellectuals claim expertise on subjects that they actually know so little about. To set the record straight, at "current crude prices", the government loses almost Rs150 for every cylinder that it supplies to you through HPCL, BPCL or IOCL. And no, the government does not earn ANY taxes on LPG sales. Customs duty? Zero. Excise Duty? Zero. VAT? Zero. The government has essentially waived off all these levies to ensure that middle class consumers like you and me do not overpay on LPG.

If you are looking for an excuse to not give up the subsidy, you will find many -

1) I pay taxes, that's enough for the government.
2) The government is corrupt, it siphons off my money.
3) Politicians subsidise their own luxuries on taxpayer money. Chicken curry costs Rs27 in the parliament canteen. Let them give THAT up first.

This can go on and on.

The question is, what can you do, that is beyond what you are REQUIRED to do? As Kennedy said, "Ask not what your country can do for you. Ask what you can do for your country."

The same individuals who, today, are finding it difficult to give up their LPG subsidy, wouldn't so much as bat an eyelid before spending Rs200 on a cup of coffee at a plush cafe. It is important to put these numbers in perspective. A household of 2-3 individuals barely consumes a cylinder a month. The Rs150 that you are loath to shell out for a cylinder that lasts you more than 40 meals a month, is a fraction of the amount you spend ordering a pizza on a whim one weekend. So if you decide not to give up your LPG subsidy, be honest enough to admit that it's a decision that is driven by purely selfish motives rather than any rational ones.

PS. This is the exact calculation of what LPG should cost at current crude prices, vs. what it actually costs consumers -

http://www.hindustanpetroleum.com/documents/pdf/pb/pricebuildup_LPG.pdf

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