Ila Patnaik makes a compulsive argument in Who killed Manjunath? and concludes–rightly–that the State’s oil policy is the culprit behind Manjunath’s murder. A wholehearted applause from my side.

The responsibility for the murder of IOC officer S. Manjunath lies with economic policy …. It is well understood that the structure of economic incentives is a far stronger force than policing. It is easy to blame the law and order situation for the murder. But the real blame lies with the petroleum price policy that created incentives for adulteration. When diesel costs Rs 35 per litre and kerosene is available in PDS shops for Rs 11 per litre, there is a very powerful incentive for petrol pump owners to adulterate diesel with kerosene. If a mafia has arisen, it is a creation of government policy. In the same way that the smuggler gangs of the 70s were the inevitable consequence of restrictions on imports, the mafia that murdered S. Manjunath is the by-product of the pricing distortions in the petroleum sector.

Here at last is one article that seeks answers at the root than in the consequences.

Because the root is rotten, everything that grows is equally rotten.

So, we have a shortage of LPG cylinders. For the last two months, gas companies are not giving new connections. A visit to an HPCL outlet is like deja vu, all over again, where an Indian consumer is a supplicant at a store and is told that the monopoly will refuse to sell to him.

And why? We have an avid Communist, Mani Shankar Aiyar as Petroleum Minister who is desperate to turn the clock back. As a first exercise, he vowed to destroy the ministry by employing his cronies and fellow-travellers. After (re) initializing statism–first in the ONGC–he is now reaping its first fruits.

True to the 1970s India, Mani Shankar Aiyar is very engaged with the LPG shortage. He promised that the LPG shortage would`1111` be sorted out in time for Diwali. He is trying to send the police after black marketeers. He should learn a lesson or two from Manmohan Singh and P. Chidambaram, who conquered gold smugglers by removing controls, not by sending in the police.

The resounding silence of this man on Manjunath’s murder is further evidence of the true character of people that we have elected to rule us. And evidence also of the fact that people like Manmohan Singh are mere figureheads, like a snake whose poison has been removed. The Congress is more interested to pander to the Left’s whims than listen to the good doctor’s sage advice. What’re the odds that Aiyar wields more power and influence than Dr.Singh? As a result, this columnist’s suggestion isn’t likely to be implemented in a hurry if at all.

Oil policy in India requires to shift away from the interests of socialists, the interests of oil PSUs and the interests of oil companies like Reliance. Instead, we need to apply the first principles of a market economy. Better health of oil companies requires the sector must be exposed to competition. At present, a host of barriers make it difficult for the private sector to import and sell petroleum products in the country. In the 1990s, India found its way out of a mess in the industrial sector - where there were thousands of incompetent companies - by cutting customs duties and opening up to imports. The same story applies in the petroleum sector. We should focus on opening up the Indian market for petroleum products to global competition. Anyone should be allowed to open petrol pumps, buy petrol from anywhere in the world and sell to customers. Each of these steps should be jealously protected from the meddling of the ministry of oil and it`s cronies in the oil sector. This will help destroy the monopoly of oil companies and force them to work in a competitive framework.

Till such time, all we can possibly do is mull over this.

Policy in the oil sector has been mismanaged over the years. Manjunath may have been the first to be murdered, but if the government does not sort out the mess it has created, it will be signing the death warrants of many more young and honest officers in the public sector.

The State as Murderer.