Where is the Gas?

Posted by: on Dec 7, 2004 | One Comment

It is December 7, 2004 as I write this. America remembers it as ‘a day of infamy’. On this day, 63 years ago the Japanese attacked Pearl Harbour.

For me this is a day of infamy in Nepal. Petroleum products have yet again vanished. Throughout the day, queues of vehicles at gas stations lengthened. It is criminal at this day and age for Nepal’s policy makers to repeatedly subject its citizens to this torture.

It is ironic that even as prices at gas stations worldwide decline as a consequence of a drop of US$10 per barrel in price of oil, Nepali consumers cannot fill up their vehicle tanks. How many times does history have to repeat itself before something is done?

That ‘something’ is getting rid of Nepal Oil Corporation (NOC). And I do mean getting rid of it in double quick time. Government has had privatization plans on the anvil for far too long. It is time for action.

NOC must be sold in a fair and transparent manner. But that alone is not enough. Care must be taken to see that it no longer enjoys any monopoly privileges.

Open up the entire oil sector – imports, distribution, and sales – to competition. Allow any company from anywhere in the world to set up base in Nepal.

It is this competition that will end the shortages, bring quality products, enhance the service at gas stations and bring gas prices in Nepal at par with the international market after adjusting for local taxes.

A major benefit of allowing unfettered competition in Nepal would be to end adulteration of petroleum products. This practice wreaks havoc on the vehicles. When companies have to protect their reputation in the open market they see to it that their gas stations sell only quality products. It is only when you have a government protected monopoly that you couldn’t care less about your customers who don’t have a choice.

Why does the economy of this country have to be repeatedly wracked by government mismanagement? Why is no action taken?

Whereas other countries learn fast, Nepal shows a proclivity to take an unduly long time to absorb the lesson of past failures. It should have been clear to all that NOC can’t meet the expectations of the people. The citizens of this country deserve better than over and over becoming a prey of this government organization.

The US, which is the world’s largest consumer of gasoline, too has faced a situation similar to what Nepal faces today. However, that was during the time of one of America’s least economically savy President, Jimmy Carter. He believed in the ‘Whitehouse’ micro-managing everything from the distribution and pricing of oil to rescue of hostages in Iraq. He was a failure and lost the election to Ronald Reagan. Shortly after Reagan took office in January of 1981, he reversed Carter’s actions.

Reagan did this by removing price controls on oil and ending the practice of allocating oil by government fiat. The results confounded Carter and his supporters. They had said that eliminating the price ceiling on oil would result in an unacceptable increase in prices people would have to pay at the pumps.

Did this happen? The results were the reverse of what Carter expected. Deregulation freed the market, ended shortages, queues at gas stations vanished overnight, and best of all the price of oil dropped.

Though prices in the US go up and down in response to international fluctuations, no President since Reagan has ever instituted government ownership or control over oil flows. And the American people have never had to queue up at pumps again.

Private companies in America are adept at fulfilling the needs of their customers. Gas stations are sparkling clean, display prices prominently and many have department stores on premises. And customers have a choice. If you don’t like the service of one you can go to another. Each oil company – Texaco, Chevron, Exxon and many more – have their own or franchised gas stations.

Should the Nepali consumer not be pampered with similar levels of service and have the same choice as his American counterpart?

The Himalyan Times

Tobacco, Alcohol, Gambling and Me

Posted by: on Apr 15, 2004 | No Comments

I smoke. I drink. I gamble. And there are plenty of people out there like me. In fact any person who has never smoked, drank or gambled would be rare to find and probably be disappointingly boring too.

What chance do government efforts have of stopping activities which, inspite of their purported harmful effects, are engaged in by an overwhelming majority at same point in their lives? None whatsoever.

I, for one, resent government intrusion into what essentially is my personal matter. Government and society has no role to play in deciding whether I light up a Marlboro, have my daily scotch, or I bet on cricket.

What is the effect of legislation which makes it mandatory for cigarette companies to place statutory health warning on all their packs and advertisements. I, like all other smokers I know, could not care less. The warnings elicit barely a thought.

And it has to be so. Anything which is as ubiquitous as warnings about tobacco gets a big yawn. It is part of the background which you see but hardly notice or pay attention to.

My doctor tells me to quit smoking, and so do my parents, wife and friends as well. I don’t need the government to do the same. This nagging, whether by friends and family or by the government, has no effect on me. At best I ignore the nags, at worst I find it so irritating that, in presence of those who object, I light up even more.

I will give up smoking whenever I’m ready to do so and not a day before. If I get cancer in the meantime so be it, I have the right to live my life as I wish and take as much risk as I desire. Perhaps my family, friends and well-wishers too will be affected by my decisions besides me, but, no one else will be. Therefore government and society doesn’t even come into the picture.

Leave my smoking, drinking and gambling habits for me to sort out with those who are near and dear to me. I value my freedom to be left alone far more then my health. I will therefore ask the do-gooders to desist from using the power of government to control my life, even if they think it will do me good. I am not a child and do not like my actions to be monitored or controlled by a nanny state, when I harm no one except myself.

And even if you wish me well, and are bent upon using government to do me good, good which I do not desire, you will never succeed. If you make alcohol and tobacco too expensive, you will, in fact do me more harm. I will not stop drinking or smoking, I will just move on to cheaper brands. I will smoke beedis if I have to but smoke I will. I will drink even illicit hooch if you make scotch too expensive, but drink I will.

What if you, acting in my interest, but against my wishes, forbid production, distribution and sale of cigarettes and whisky, and, make gambling illegal. You will be making a big mistake for you will achieve nothing. Don’t worry about me, whatever you do, I will get my smoke and my drink from illegal, underground sources if you make it impossible for legitimate businessmen to supply what I need. I will also find someone to accept my bets whatever you do.

Economics and history would both be on my side. Mahatma Gandhi tried to enforce prohibition in India. He failed. India’s efforts to ban gambling have resulted in every street in India having gamblers who will either be placing or accepting bets on cricket matches. Americans experimented with prohibition in the 30’s, the experiment was a miserable failure leading to the rise of gangsters like Al Capone who kept the Americans well supply with their daily drinks. America’s current efforts to control drugs have also failed and have in fact exacerbated the drug problem. The underworld keeps drugs within easy reach of all students in every campus in every US state.

My advice to government, society and do gooders, ‘Leave me alone, for it ain’t anybody’s business if I smoke, drink, or gamble.’

The Himalyan Times