Sunday, June 8, 2014

GAS PRICING - BUILDING THE TRUST or TRUST DEFICIT?



“There is one thing that is common to every individual, relationship, team, family, organization, nation, economy and civilization throughout the world — one thing which, if removed, will destroy the most powerful government, the most successful business, the most thriving economy, the most Influential   leadership, the greatest friendship, the strongest character, the
Deepest love. On the other hand, if developed and leveraged, that one thing has the Potential to create unparalleled success and prosperity in every dimension of life.

That one thing is trust."  Stephen Covey in Speed of Trust   

It has been reported that gas prices will be raised from 4.2 dollars to 8 dollars from 1st of July as demanded by Reliance.  Reliance has already been assured, while the Ministry is yet to give a presentation to PM Modi.

This has been opposed by many including the AAP leaders, not because they have any ill will towards Reliance, but for its impact on the AAM adami. Congress govt was in a hurry to raise the prices. People already felt cheated by the govt. due to selling of public resources like coal, 2G, to benefit the private business man and receive kickbacks underhand. Public felt cheated and started losing trust in the Govt. This loss of trust led to the humiliating defeat of the congress.

This is high time that the present Govt should earn the trust of the people by fixing the price of gas by listening to all the stake holders. There is already suspicion in the mind of aam adami because of the different versions by different parties:

1) As per the admission of Reliance, the cost of gas extraction is around 1 Dollar. But demands 8 dollars based on Rangarajan Committee. (Experts say committee has given a flawed logic)

2) As per AAP leaders, gas being supplied in Bangladesh is at 2.4 to 2.6 dollars.
(Experts say that logic given by AAP to compare prices with Bangladesh is also flawed as extraction cost from on shore, off shore and deep well differs greatly. But we should think of an alternative of buying the Gas from Bangladesh) 

3) Gujarat Govt demanded the rate be revised to 14.2 dollars
(Based on a crooked logic that people can afford LNG at a price of 18 dollars, and we are only asking 14.2 dollars. If this logic is extended to water that people can afford bottled water at Rs. 10 per liter, so any rate less than 10 Rs, will be helping the people.)

All of the above may have their own interests in giving this information based on flawed logic. But the information is so contradictory that Aam adami is in a fix to judge which one to trust.  Petroleum Ministry further compounded the mistrust of Aam Adami, by assuring the Reliance Industry to raise the price to 8 dollars from 1st July even before giving a presentation to PM Modi.

This will further erode the trust of common man in Bureaucracy and Govt. One can expect that in the presentation to PM they will only justify the rise.  Thus, leaving no scope for PM Modi to take a decision in the interest of Aam Adami. At least, till the PM listens to other experts who have interests of common man in their heart.


As People have voted for a hope in Mr. Modi, he should use this moment to create trust in the hearts of aam adami, which will help the people to listen the govt and not others in future also. By raising the trust index only we can hope for a better India tomorrow, as all the developed counties have a very high index of trust. Raising the Index of trust will help India grow much faster than raising Sensex .

Following graph from " Smart Trust "  by Stephan Covey et al  shows the graph between Trust (low corruption ) and National Income. You can see the place of India in High Corruption ( Low Trust) and Low Income