Comments on: Fuel Surcharge for Private Cars

By: lurker

lurker — Mon, 09 Jun 2008 07:39:09 +0000

The case you are making, and the case that some have problem with being victimized, is the current case of common man. Even though he rides a bi-cycle (so to say), he still feels the heat of the oil (both literally and economically).

On the other hand, I wonder how much can technology can solve this problem. If you wire something to the odometer that gives how many miles a vehicle has traveled, it could be possible to make everyone happy (although ppl who travel more will still crib, thanks to our ancestral attitudes). Technology (especially information technology) has the potential to solve a lot of our problems without the need for much (in)human intervention. But I am just dreaming.

-Mike

By: dp.chalasani

dp.chalasani — Sat, 07 Jun 2008 16:27:36 +0000

Atanu,

The reason I ask is…might owning a car bias your thinking?

Hey, I thought I was the second best driver on the roads! You just spoiled my day!

By: lurker

lurker — Sat, 07 Jun 2008 13:46:36 +0000

It is obvious that any solution comes with the following caveat. The first thing that the govt should do before imposing any tax on any thing, is to build a very good public transport ( if not like in Singapore, atleast like Mumbai). Btw, good public transport in Metros and big cities is still feasible, but what about cities like Raipur, Bhopal, Allahabad, Belgaum. There are simply tooo many of them. I doubt if govt possess the resources and more importantly political, admininstrative, financial and social will in such a huge scale as to build public transport in all these cities. I am assuming its not a feasible solution. So possibly, the best solution is to increase the rates of petrol. When that happens those who cant afford to drive car wont drive, those who can drive will still drive according to their new altered budget. Possibly, thousands of people whose living depends on not increasing the fuel price will be on the streets, but what to do, if we exploit the nature, someday this is bound to happen anyways. We cant fool ourselves longer, the market has to come into a new equilibrium according to the rising fuel cost. Let market rule.

– Pravesh Biyani

By: Atanu Dey

Atanu Dey — Sat, 07 Jun 2008 05:57:54 +0000

DP Chalasani:

No, I don’t own a car. Unlike in the US, in India I can do without a car.

I love cars and consider myself the second best driver in the world (note, my inherent modesty in admitting that there is one better driver in the world than I.)

Seriously, though, I’d like to know why you ask.

By: dp.chalasani

dp.chalasani — Fri, 06 Jun 2008 19:35:25 +0000

Atanu,

Do you own a car?

By: Sundar

Sundar — Fri, 06 Jun 2008 14:13:36 +0000

Lurker:
If it is based on Miles, lots of mechanics will get busy fixing / resetting milometers.
Any credit for negative miles?

PS: Chennai used to have autos with tampered meter to inflate the charge. Now we have more electronic meters but never switched on and flat rates charged are expensive than Cool cabs in Mumbai!.

By: lurker

lurker — Fri, 06 Jun 2008 13:48:22 +0000

Why not tax for the number of miles driven per year? That tax rate would be based on the make/model or engine capacity/power/etc.

PS: Can we no longer register a username on this site?

By: Atanu Dey

Atanu Dey — Fri, 06 Jun 2008 08:01:07 +0000

Parijat:

I did not say that petrol at the pump should not be charged at full cost. In fact, I am arguing for it. My solution was just an intermediate step, as I clearly note in the excerpt quoted.

Also, my solution is not anti-free-market. Free markets work. But for them to work, one of the conditions (necessary but not sufficient) is that externalities are compensated for. Imposing a surcharge is an attempt at fixing the distortion. It is a second-best solution in a second-best world.

This whole matter of a free market and why it makes sense is a topic for an independent post. Perhaps in some time I will write more on it.

By: Sundar

Sundar — Fri, 06 Jun 2008 07:59:53 +0000

There should be a special annual tax on private cars and even on two wheelers. This money should be used to build excellent public transport networks. I agree with the large issue you had mentioned.

Fuel surgarge on private cars does not look practical and feasible. This will be withdrawn the moment fuel prices go down and the larger issue will be forgotten.

By: parijatgarg

parijatgarg — Fri, 06 Jun 2008 07:40:58 +0000

Atanu. Somehow, this solution that you have provided, and the rationale does not feel comfortably snug with free market economics. Sure, I could decide to not buy a car at all. However, if you are living in Gurgaon and wish to commute to Delhi once in a while, it is sort of imperetive to have a car. And yet, a flat tax per car (based on model, etc) seems all but unfair.

In any case, if the cost of petrol for the country is higher, it must be charged at the pump and nowhere else. If anything, petrol pumps could be authorized to charge more for filling up car-tanks as opposed to say scooters or mo-bikes. Of course, you’d soon have the problem of petrol-pumps refusing to carry enough inventory of “cheaper” petrol for bikes as opposed to that for cars, forcing two-wheeler owners to also get petrol at the prices for that of a car. But then, any kind of subsidy is a distortion and an incentive to cheat – you can expect nothing more and nothing less.