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| Cut petro prices for common man | | | India’s soul is of a socialist country and not capitalist. But when it comes to fixing the petro prices, india behaves as a capitalist countries as interests of oil companies prevail over the interests of common man.
Prime Minister Manmohan Singh’s statement that petroleum product prices will not be reduced in the near future runs against common sense and earlier promises made by the government. The prime minister wants to wait for the oil marketing companies to break even before going in for a price revision. Petroleum Minister Murli Deora has also confirmed what the prime minister indicated, though this directly contradicts what Deora had promised last month. He had then said that the product prices would be reduced if crude went below $ 65 a barrel. It has now plunged below $ 60, but the government is reluctant to keep its promise. The price increases were effected in June when the crude price was skyrocketing. And the upward revision took place just four months after an earlier hike. The twin increases, coming in quick succession, had hit the common man, the middle class and the economy badly. But the crude price has since crashed, after touching an all-time high of $ 147 per barrel. Now it is at a 22-month low. Oil marketing companies are now making a profit in the sale of petrol, though they are losing money on other products. It has never been the government’s practice to link the retail prices of petroleum products closely to the balance sheet of marketing companies. Even the depreciation of the rupee does not change the situation much. Therefore the present insistence can only be an excuse, perhaps a wait for a more politically rewarding time, like the run-up to the general elections. That shows an opportunistic and unethical attitude to a matter that affects the lives of the people badly. The increase in prices of petroleum products was an important factor in the rise of inflation to above 10 per cent levels. A reduction in product prices can have a welcome impact on the general price index, especially when the recent liquidity-boosting measures from the RBI may again fuel inflation. Aviation turbine fuel prices were reduced recently to help an industry which is in dire straits. A reduction in petroleum prices will be much more beneficial to a much larger number of people. Therefore, there is no justification in either the prime minister’s or in Deora’s position, and the government should immediately reduce the prices. Taxes constitute much of the prices and they can be reduced to bring down the prices at the consumers’ end. Crude prices are unlikely to go up in the near future, with recession putting pressure on demand and prices, and so there is no need to fear that the mismatch between global and domestic prices will increase. |
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