Kejriwal Clueless About Economics? Or Fooling His Supporters?

So I just saw this status update from Kejriwal on Facebook, and sometimes I think the man is either clueless about economics or so desperate in his "blame the government at whatever cost" game that he ignores economics/common sense and is fooling the masses who is following him.

Here is the post:

He claims government is exporting diesel at Rs 42/- per liter and yet selling at a higher price Rs 55/- per liter, and based on this he concludes there is no subsidy and government is lying.

Rs 42 per liter is the price at the which we buy from the exporting country. Lets assume that that is the cost at which it is delivered at our port in Bombay.

Once the product has arrived at the port, it has to be unloaded into tankers, cost. If sufficient tankers are not available at the time the ship arrives, the ship has to wait in the harbor, cost. The product is very hazardous and possibly corrosive so the transportation containers are costlier than the usual shipping containers used for inland transportation, cost. Then the tankers have to travel from Bombay to 1000s KM. Cost.

At destination they unloaded, cost, stored in local storage facility, cost, and after a few days or weeks sent loaded back into transport tankers, cost. Finally at the petrol pumps, the product has to be safely kept in a area in the dense population, cost. Eventually the petrol pump owner is not doing a charity, he is running a business. Cost.

All this assuming there is no custom duty, there is no sales tax and so on. Taxes themselves cover the difference, and if government is not charging it, it is subsidy, the roads and trains to transport it are still built, the tax department still has to audit the transaction, etc.

Conclusion

Kejriwal has assumed all of these costs, tax and custom duty breaks do not exist. He assumes that Rs 13/- is the profit government is making in all this and is lying to us about subsidies. He is either a fool or is dishonest.