The new Ali Babas

The UPA government has dealt a most unkindest blow to the people with its  decision to effect a hefty hike of over Rs 3 per litre in the price of petrol. All the claims of caring for the interests of common people sound sham when it again and again hits their pockets when life is becoming more and more difficult.

Inflation is raging at near 10 per cent and the prices of every commodity of daily use for a household are shooting up. Instead of bringing some relief to the people, the government is adding to their burden. This is the second steepest hike in petrol prices in one year, after the increase of over Rs 5 just four months ago.

There have been nine price increases since June 2010, making a cumulative increase of about 40 per cent. It amounts to serial robbery and compounded misery. It was burning oil that helped Ali Baba to get the better of the robbers at his door. But midnight robberies are executed in our country with the help of burning oil.

The new excuse this time is the depreciation of the rupee which has caused crude prices and under-recoveries of oil marketing companies to go up. Currency price fluctuations are temporary and it is unlikely that the petrol prices will be marked down when the rupee appreciates.

The greater impact of a cheaper rupee will be on diesel prices which have been left untouched. That is proof of the political and opportunistic nature of the government’s oil pricing policy. The growing imbalance in the use of petrol and diesel will cause revenue loss and is counterproductive. Petrol has become a common man’s fuel because of the widespread use of two-wheelers and small cars. The government’s action will hurt this section most.

If the government was willing to rationalise the tax structure of petroleum prices it could have avoided this unpopular and people-unfriendly measure. About 50 per cent of the prices of petroleum prices is accounted for by taxes. If the governments were ready to forgo a part of this, the prices would be affordable to the people.

The computation of under-recoveries is not scientific and realistic. The figures are highly questionable. In effect the people are being made to pay for the inefficiencies of oil marketing companies. What better deal can the people expect from a government which has ceased listening to and caring for them?