The chill in Boston has made its way to Bangalore. Last month’s Polar Vortex sent temperatures crashing in North America and Europe, and pushed up demand for domestic heating. As a result, the price of propane, used for domestic heating, flared up 42% in 21 days, according to the US Energy Information Administration (EIA).
This spike is trickling about 8,000 miles away into the balmy Indian city of Bangalore. Here, not only are higher gas prices causing a sharp increase in the running cost of three-wheelers, they are also threatening city government efforts to make public transport less polluting.
Three-wheelers, also known as auto rickshaws, are an intrinsic part of public transport across India. There are 120,000 three-wheelers plodding across Bangalore alone. They run on auto gas (LPG), which is mainly propane and is mostly imported. In the past few years, several city governments in India, on their own or on direction from the courts, have forced three-wheelers to switch from petrol to LPG as the latter was cheaper and cleaner for the environment.
But the Polar Vortex effect is erasing that second advantage at an alarming pace, adding to the simmering differences between three-wheeler drivers and authorities. On Jan. 1, Indian Oil Corp., the largest retailer of automobile fuel in India, increased the price of auto gas in Bangalore by 20%—from 54.40 rupees per liter to 65.53 rupees. As a result, auto gas is now only 10.5% cheaper than petrol, versus 21.5% before the latest price rise. On July 1, this differential stood at 41%, making a clear case for auto gas.
Not anymore. For a three-wheeler driver in Bangalore, the higher prices are a straight addition to operational costs. B. Chandrashekar, general secretary of Karnataka Rajiv Gandhi Auto Taxi Chalakara Vedike, a trade union representing 12,000 auto rickshaw drivers, explains the economics. A driver makes 1,600 rupees ($19.20) a day. But of this, he pays a daily rental of 400-600 rupees ($6.40-$9.60) to the owner of the auto—60% of autos in the city are on hire. Another 326 rupees ($5.20) goes toward gas. He ends the day with a net profit of 674 rupees ($10.70).
Now, it will be less, as he will have to absorb the latest hike in gas prices. The government authorities in Bangalore had recommended a 18% fare hike, but this was rejected by three-wheeler drivers on the grounds that it was not enough.
As it is, relations between the authorities and auto drivers are testy. Another bone of contention is the 12,000 rupees per vehicle the authorities want auto drivers to spend to install a GPS and an electronic billing system. Gas prices that are rising and converging to petrol prices could cause temperatures between the authorities and auto drivers to rise further—at least until temperatures start rising in the US again.
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