Petrol & Gas Price Hikes: Root Cause Is The "Funny Money"

Petrol and cooking gas prices have been hiked - and further hikes are expected. The editorial in Mint says, "the change in the price of fuel is rational and should be accepted by all." Really?


Let us begin by turning our attention to the USSA, where "quantitative easing" began. There is a perceptive post in EconomicPolicyJournal.com in which Ron Paul is quoted as follows:

Ron Paul in a recent debate pointed out that roughly 50 years ago you could pay ten cents for a gallon of gasoline and that the dimes which were made of silver back then are now worth the same (because of their silver content) as a price of a gallon of gasoline today. 

The same blog (which features on my Blog List) also has another post on the fact that gasoline prices in the USSA are at record highs.


This is nothing but INFLATION.


Ben Bernanke did his "quantitative easing" (code for printing more paper dollars) and our chacha followed suit with his "economic stimulus." This was just "central bank co-ordination" - so that the whole world would float to a higher price level. That is why we Misesians call them "banksters" (as in "gangsters"). This central bank co-ordination is the state-of-the-art in banksterism. Our chacha is just a puppet in their hands. He is sacrificing our interests for those of the US State - and the US State, and the US Fed, are sacrificing the interests of the American people for the interests of their The State. Rotters! The only solution is the Gold Standard. So, if India was on the Gold Standard today, prices would be falling, not rising. Oil and gas would be cheaper, not dearer. 


Today, it is NOT the case that "prices are rising." Rather, the fact is that the value of the rupee (and the US dollar) is falling. This is because they are flooding the markets with these paper notes. And when the supply of anything increases - like potatoes, for example - its value must fall. That is all there is to it.


Do read another post from EPJ on what a reader told Steven Levitt (of Freakonomics) on gold, thereby educating him.


And do read this Deutsche Bank report on the Indian rupee, which says that its long-term prospects are not bright. Thus, if we do not adopt the Gold Standard today, the prices of imported oil would keep on rising indefinitely in the future. The report also mentions that we still owe some $5 billion to Iran!


Let us turn our attention now to cooking gas. In India, this is sold in cylinders, with street food vendors paying higher prices than domestic users, thereby making cooked food expensive for the urban poor - who do not possess homes with kitchens. 


Second: While this gas comes out free from the ground, the biggest cost in getting it to the consumer, apart from bottling, is TRANSPORTATION. In India, big trucks transporting gas are a common sight on our broken highways. Similarly, in the cities, trucks transporting gas cylinders, little tempos doing the same, and even chaps ferrying cylinders on bicycles are a common sight. All these costs could be reduced by PIPE-LINING gas. Ever heard of "Gaslit London"? All that gas was piped.


Thus, there is no real "subsidy" on cooking gas. If gas was piped, the costs of bottling and transportation would come down to ZERO - and we would all save money.


Lastly, on petrol again - there are HUGE TAXES. If the people rise in protest - as they should - and demand a complete rollback on all taxes on petrol, prices would come down drastically.


So, the Antidote is:

First, a return to the Gold Standard in India.

Second, pipe-lining of gas. 

And third, a rollback of all taxes on petrol.

Rise in protest, my countrymen!