Crude realities: PM finally bells the cat

By Deepak Nagpal | Last Updated: Sunday, June 8, 2008 - 00:00

Deepak Nagpal

Consider this situation: You have your all-important final mathematics examination next month and your class teacher is going to check the crucial paper, which would determine your promotion to the next class. However, suddenly you find the class teacher favouring one particular student. Would you show the courage to go and complain either to your parents or the school principal about the teacher`s behaviour and invite her wrath? I challenge 29 out of the 30 students in the class would choose to keep quiet and let the exams pass!

Now compare this situation with the one recently faced by the Manmohan Singh government at the Centre. Dr Singh led UPA government was facing a crisis which it could no further ignore – of the rising global oil prices. There was an immediate need to provide help to oil PSUs, whose balance sheets had taken a severe beating due to the relentless rise in international crude prices. On the other hand, his government would face General Elections in little over a year’s time and it just could not take the risk of making the common man angry – in whose hands lies the government’s future.

However, in a show of courage, which very few governments are capable of displaying and ignoring the aftermath of next Lok Sabha polls, Dr Singh’s government raised the fuel prices (Petrol by Rs 5 per litre, diesel by Rs 3; domestic LPG by Rs 50 per cylinder), while also cutting down customs and excise duties on imported crude oil and petrol and diesel.

The international crude oil prices touched record levels of USD 135 per barrel in May, and are currently hovering around USD 130. The state oil firms – Indian Oil Corporation, BPCL and HPCL – were under tremendous pressure due to skyrocketing prices. The situation was so serious that both BPCL and HPCL were left with cash enough only to import oil till August. The situation at IOC was no better and it had cash only till September. Now it’s anybody’s guess that beginning October, the country would have faced a serious situation where it would have had almost nil fuel to run the economy (India is a net importer of oil and its indigenous production is negligible when compared to its needs).

If that would have happened, a large number of aeroplanes would have been grounded, public transport would have come to a halt, private vehicles would have become only a showpiece, even for those who had the money to pay for them – because despite the availability of ready cash, petrol would have been a scarce commodity in India.

So considering all this, one with common sense would not find it hard to understand the logic behind the fuel price hike (the Left parties and opposition BJP seem to have their eyes shut when they claim there was no justification for the hike). The Petroleum Secretary aptly said: “It is better to pay more for the fuel than have no fuel at all in the country.”

It would be purely opportunistic politics to criticise the UPA for hiking the fuel prices. Last time the current government raised the fuel prices was in February this year, when the cost of Indian crude basket was around USD 60. Now, the same amount of fuel is costing around USD 125 to Indian oil firms. If the Left and the BJP still claim the hike is unjustified, especially when the Central government has also reduced customs and excise duty sharply thereby affecting one of its main sources of revenue, it can probably be termed as the crudest form of politics.

The UPA was already finding it hard to tackle the surging inflation, which had touched figures of 8.1% the week before it announced the fuel price hike. And very well knowing it was severely reducing its chances of coming back to power in next year’s General Elections by effecting sharp rise in petrol, diesel and LPG prices, the government took a very ‘courageous’ decision .

It doesn’t matter where decisions are taken in the UPA – whether at 10 Janpath or 7 Race Course Road – what matters most is whether the decisions are in national interest or not. A government just cannot let its oil firms die a slow death just to save its chair. And this is what the Manmohan Singh government has done. Though the fuel price hike affects me and my family too, I still dare to say – kudos to the daredevil PM!

And now it’s time for the Prime Minister to show more courage and go ahead and take the much-delayed decision – of implementing the Indo-US civil nuclear deal, to ensure India’s future energy needs are met. Let those playing politics continue to play.



First Published: Tuesday, August 9, 2011 - 17:01
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