If the government had put in only a little thought, it would have realized that a premature disclosure of the coming petrol price increase would have the consequences it did. The disclosure by Petroleum Minister Dr Asim Hussain was followed, as could have been predicted by anyone with even a nodding acquaintance with the petrol business, by both rationing and a simple refusal to sell. The new prices will not come into force until Wednesday but it seems that the earlier announcement of their rise only compounded the miseries of the motorists.
The price rises are massive. The price of oil has risen in the world markets, and that has been coupled with the depreciation of the rupee. That might be the explanation, but the resulting hike in the price of fuel will raise the prices of everything else. Transport fares will go up, and because of that buses, plying both intercity and intracity, will charge more. Not only will the cost of human movement increase, thus creating an additional expense for commuters, but so will the cost of transport, which will mean an across-the-board hike, as everything is transported to markets. Thus the inflationary effects will not only affect the consumer, who has already been hard hit by inflation, but he will also be made anxious by the rationing and the shutting down of petrol pumps. As the outlets will have to pay the previous prices for what they had received, obviously they stand to make a windfall if they can sell the products at the new prices. As it is, the pumps stand to gain an extra Rs 5.50 per litre of petrol, and Rs 6 per litre of HOBC.
Dr Asim’s casual disclosure does not reflect the fact that he is a technocrat, and has led to very unfortunate results. It has also been learnt that the reduction of Rs 4 on the petroleum levy has not been made, which would not mean complete relief for the consumer, but would ease the impact of the present increase. However, the government’s need to garner more revenue, by whatever means possible, to satisfy the IMF, means that such unpopular measures are taken.
The impact of rising oil prices should be absorbed by the government, which does not pass on the benefits of any decline. The present raise should not be extracted from the consumer, and profiteering must not be allowed in this fashion. If there is any need to balance government expenditure, it must be done by cutting back on luxurious lifestyles maintained at the taxpayer’s expense, rather than by raising fuel prices, and thus the cost of virtually everything.