In separate presentations to yet another "expert committee" on oil pricing reforms in late November, they advocated yet again that New Delhi free up prices of gasoil and gasoline.
The arguments paraded in favor of liberalizing two of the four "sensitive" products -- leaving LPG and kerosene alone for now -- are not new.
These include level playing field for the private refiners, which the government does not compensate for retail losses like it does the three public sector marketers; more competition begetting greater efficiency and benefiting the consumers; and a reduction in the government's fuel subsidy burden.
This view came from the private sector oil players, but the state-owned marketers, which were put through the most excruciating financial squeeze last year as their fuel subsidies soared on the back of rocketing crude prices, would heartily agree.
Having to wrestle with a cash crunch for months while waiting to be rescued by the government's "oil bonds" is the last thing the public sector companies want as they strive to operate at international standards and compete on a global platform.
The committee on oil pricing, headed by senior Planning Commission member and US-educated economist Kirit Parikh, is keeping the quintessential "common man" at the center of the picture. From that consumer-centric perspective, everything looks different.
The committee is concerned about the impact of high oil price volatility, should it make a comeback, in a deregulated market. Would oil companies keep in lockstep with world crude if it swings between $80 and $180/b, for instance? And if they do, should the consumer be at the mercy of wildly buffeting pump prices?
The presenters to the committee made a case that prices appear to have stabilized in the $70-80/barrel range. That may be so. As for level playing field -- what's in it for the common man?
Sure, the state's fuel subsidy burden will ease if only two instead of four refined products are subsidized. However, if the government needs to whittle down the taxes on oil products to ease some of the pain of high prices, it might not come out such a big winner.
But liberalization benefiting the consumer? That's a new one. Competition might force companies to strive for efficiency, but there is no guarantee they will pass on any savings to the consumer. In free markets, rival oil companies price their product uniformly and profit equally if their production costs are similar. It's not as if the consumer saves by going to the cheapest retailer.
But should consumer interest alone be driving the bus? The consumer might not be the immediate and direct beneficiary of price reforms, but energy resource management needs to be far more holistic than cheap fuel for the masses.
If the state oil marketers were free to price the products today, gasoline would be about Rupees 3.85/liter (8.3 cents/l) dearer at the pump, while diesel would cost Rupees 3.71/liter more. Gasoline currently retails for Rupees 44.63/l and gasoil at Rupees 32.87/l in Delhi.
If prices of kerosene are freed up, the fuel used by the poor for home cooking and lighting needs would cost Rupees 25.43/l instead of Rupees 9.09/l. And households would have to fork out Rupees 481.58 for a 14.2 kg LPG cylinder instead of the current Rupees 279.70.
Of course, the hikes will pinch. But the idea is not to shelter the consumer for eternity at the expense of prudent and efficient use of energy sources. Nor to keep the public sector oil companies forever dependent on government largess. Nor to lull the economy into such a state of dependency that it can only flourish in a subsidized world. Nor to create an artificially static and low-price environment at home oblivious of how the rest of the world is reacting and adapting to the reality of high prices.
Sustainability has to be the guiding mantra for decisions related to energy pricing reforms -- not political expediency or the common man's convenience.
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