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It’s interesting that the Petroleum Planning and Analysis Cell plans to undertake a study on the increasing consumption of diesel in the country despite the fluctuations in crude prices (Business Line, October 20).

One feels this exercise is quite unnecessary as, economically speaking, the demand for petroleum products is inelastic.

That is, any increase in their prices will have a negligible impact on demand in view of their indispensability.

Moreover, consumers expect that in future there may be scarcity of diesel and its prices will rise still further.

And this situation would drastically affect the product’s demand and consumption pattern.

S. Ramakrishnasayee Ranipet

More Stories on : Letters | Petroleum

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