Petrol Racing for Rs 100 Mark

GroundReport | Author: SYED ALI MUJTABA SYED
Filed Under: Opinion, Politics | Posted: 05/27/2012 at 9:59AM
Comments | Region: India

After Sachin Tendulkar 100 hundred, the next 100 that is being talked about is the prices of petrol as to when it will touch the three digit figures.

The race for this is on and the confirmation came on midnight 24th May, when the central government announced the hike of petrol prices to unbelievable Rs 7.54 per litter.

Petrol prices have risen from Rs 42 to Rs 76.35 in last three years. The UPA government if it goes by similar pace, in the next two years when it completes its term in 2014, it would surly make the century.

Justifying the price hike, Petroleum Minister Jaipal Reddy said, "India is facing the twin crisis of rupee devaluation against US dollar and a substantial increase in the international prices of crude oil. This is a global problem beyond anybody’s control. There is no instant solution to the problem."

Reddy added, "Petrol is deregulated… but during certain periods, oil marketing companies were not able to raise prices of petrol, because of which they have lost massively.. Our oil companies are bleeding. Rs 2200 crore was lost only on petrol in the year 2010-11. Rs 4800 crore was lost in 2011-12 and in the last two months, a loss of Rs 2330 crore was made. This amount has not been compensated."

Finance minister Pranab Mukherjee said government had deregulated the fuel in June, 2010 and the decision to increase the prices was taken by oil marketing companies.

CPI (M) politburo member, Sita Ram Yechury disagrees. “The petrol price increase is unwarranted because the international price of crude has fallen. They have fallen more than the fall in the value of the Indian rupee. Hence, there is no justification saying that our imports have become expensive and prices are to be hiked,” he said and added that the government is serving the interest of companies at the cost of the common man.

Tamil Nadu Chief Minister Jayalalithaa slammed the government on the steep hike in petrol price saying. “It could have been avoided by reducing the profit of the government as well as private run oil companies, reducing the tax on petrol and checking the falling rupee value.”

BJP dubbed the hike as "unreasonable." "If the Rupee is depreciated, it is not the fault of the people. It is due to wrong economic policies followed by UPA government," Party spokesperson Prakash Javadekar said.

Shiv Sena Chief Bal Thackeray was more boisterous. “In the last three years prices have been increased 16 times, he said and claimed that now liquor in India is cheaper than petrol.

UPA allies are also unhappy with the petrol price hike. “It is unjust and unilateral. We cannot accept the price hike burden on the people," said West Bengal chief minister Mamata Banerjee.

Samajwadi Party supremo Mulayam Singh Yadav demand from the Centre to check inflation and roll back petrol price hike. The DMK, urged the central government to at least partially roll back the petrol price as the hike had imposed an additional burden on the people

The government is unrelenting and has refused to immediately rollback the sharply hiked petrol prices. Oil minister Jaipal Reddy, ruling out any rollback has assured that the government will take measures to soothe impact of steep hike in petrol prices

Reddy indicated that there could be a reduction in petrol prices in near future seeing downward trend in international crude oil prices and hoped that center and states would reduce taxes on it. Most of the states have 20% local levies on petrol and that can be reduced, he said.

As the petrol prices canters towards Rs 100 mark, the common man is feeling the heat. Its cascading effect is telling on the markets, services and other sectors.

The prices of essential commodities are going out of control. There is a general resentment among the people. How this anger would translate, is something that needs to be watched.

It is likely that in near future the petrol prices may be reduced by Rs 1. This projection is based on persistence of the downward trend of the international prices of crude oil in the Singapore bulk market.

The government may take credit for this and placate its allies who are demanding the roll back. However, in reality, it is helpless to control such mayhem erupting every now and then.

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Syed Ali Mujtaba is a journalist based in Chennai. He can be contacted at syedalimujtaba@yahoo.com

Filed Under:Opinion, Politics

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