The Hindu Business Line : Oil prices

"Oil on high" (Business Line, September 30) is a matter of concern. The question is whether the crude price will go higher than the present $50 per barrel and how to meet the challenge. The editorial rightly points out that "now is the right time to put in place a dynamic taxation system wherein levies move antithetically with oil global prices so as to keep retail prices within a comfortable price band".

The Government could switch from the present ad valorem duty structure to one that has cut-off price beyond which duties will not pile upon rising prices.

The Government must also reduce import duty on crude oil and the State governments should also fall in line. Policy initiatives should be introduced to create competition in the market so that the some of the enormous gains made by oil companies are passed on the consumers.

Other than concentrating on new finds, acquisitions and conventional energy, as pointed out in one of your recent editorials, efforts to develop new energy sources, such as hydrogen, should be accelerated.

A. Jacob Sahayam

Thiruvananthapuram

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