Random Thoughts.

July 2 - Mushtaq Minhas on his July 2nd episode of Bolta Pakistan had an interesting response to a caller's (from USA) observation that diesel in USA cost Rs37 or 47 per liter while in Pakistan it was costing more than double - may be four times I do not recall the exact figure he quoted.

Mushtaq's response to the caller: USA had a vast fuel reserve. It also gets cheaper fuel from its negihbors like Canada and Latin America.

If having vast (untapped) reserve of oil and being close to the exporters of oil to it is a valid rationale, then bottled water in USA should be almost free!

After all USA is surrounded on all sides by oceans from where water supply can be FREE. It also has a vast reserve of underground water.

Ironically however, bottled water in USA costs $4 or more a gallon - double of fuel. Gas (I mean petrol) costs between $2 and $2.50 a gallon only and that even now. It was cheaper before. What is the real rationale?

US establishment has insured that the component of fuel cost as part of the production costs of anything and everything in USA is always bare minimal. How?

My two cents: By insuring majority fuel imports (directly or indirectly) are from such countries, for instance, like Saudia, where oil is not a national wealth, therefore not subject to price increases to fund public lifestyle growth. Trickel down economy is unknown. The kingdom thus can arbitrarily decide how much to sell for and how much to produce.

As for Latin America, the countries have deliberately been forced to remain economically at a level where cost of producing oil does not increase. Labor is cheap! Sans institutions, prices are fixed arbitrarily too.