They keep preaching the difficulty of the dual pricing of diesel to avoid cars to take advantage of the subsidy. But I think it's not at all difficult rather it's very much possible practically.
The problem is to make sure cars owners pay more for the diesel fuel but also take care that the burden doesn't fall on the poor directly and indirectly too.
So why not put meters at the petrol bunks in the cities. Much like those that are used to measure electric/municipal water consumption in our homes. Then a person with a hand held meter can go to the petrol bunks every 7 days or so and check the liters of diesel sold and charge the desired extra rupees per liter and collect the money. The petrol bunk owner would have no choice but to charge the extra amount from the car owners while they buy it. The govt could announce the official rates of diesel for automobile consumption so that the consumers can avoid being cheated. When there is only one price at which the suppliers buy the fuel, the phenomenon of diversion doesn't occur. They buy it at subsidized rates with the rest but pay back the subsidy to the govt. after recovering it from the consumers.
The goods carrying lorries, whose burden of increased fuel prices would tend to fall on the poor by causing prices of commodities that they transport to rise, would be insulated because they almost always refuel on the highways. Of course this would mean that cars/private buses traveling on highways would dodge the increased prices. But this is a very small let-off compared to doing nothing.
The problem is to make sure cars owners pay more for the diesel fuel but also take care that the burden doesn't fall on the poor directly and indirectly too.
So why not put meters at the petrol bunks in the cities. Much like those that are used to measure electric/municipal water consumption in our homes. Then a person with a hand held meter can go to the petrol bunks every 7 days or so and check the liters of diesel sold and charge the desired extra rupees per liter and collect the money. The petrol bunk owner would have no choice but to charge the extra amount from the car owners while they buy it. The govt could announce the official rates of diesel for automobile consumption so that the consumers can avoid being cheated. When there is only one price at which the suppliers buy the fuel, the phenomenon of diversion doesn't occur. They buy it at subsidized rates with the rest but pay back the subsidy to the govt. after recovering it from the consumers.
The goods carrying lorries, whose burden of increased fuel prices would tend to fall on the poor by causing prices of commodities that they transport to rise, would be insulated because they almost always refuel on the highways. Of course this would mean that cars/private buses traveling on highways would dodge the increased prices. But this is a very small let-off compared to doing nothing.
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