No option but to hike fuel price: PM
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N.Sukumar
Jun 2, 2008, 3:47:56 AM6/2/08
to Kences1
NEW DELHI: Prime Minister Manmohan Singh on Monday said the government
was left with no option but to hike the price of fuel due to soaring
price of crude oil in the global market and asked for "wider political
consensus to adopt more rational economic policies".
“We cannot allow the subsidy bill to rise any further. Nor do we have
the margin to fully insulate the consumer from the impact of world
commodity price and oil price inflation,” Manmohan Singh said at the
annual summit of the Associated Chambers of Commerce and Industry
(Assocham).
“Up to a point we can insulate poor sections of our society and we
have done that. Our government has not raised the price of kerosene in
the past four years. We have only marginally raised LPG and diesel
prices. Even petrol prices do not fully reflect world trends.
"In the case of other national resources, especially water, we have
been altogether imprudent. This situation cannot continue forever. We
need wider political consensus to adopt more rational economic
policies,” the prime minister said.
In view of the above, the petroleum ministry had even proposed to
raise petrol prices by Rs 10 a litre, diesel by Rs 5 per litre and
that of cooking fuel Rs 50 per cylinder to cut losses being incurred
by the state-run firms. But the Left parties had categorically said
they would oppose any move to hike prices of transport and cooking
fuels since the average citizen was already burdened by high
inflation.
However, all said and done, petroleum minister Murli Deora had
indicated that they were concerned at the financial health of the
PSUs, and "there are some measures that are under discussions," he had
told the media.
We should also bear in mind that oil prices have doubled since last
year, buoyed by mounting fears of supply bottlenecks due to robust
economic expansion in Asia and continued supply disruptions in key oil
producers such as Nigeria. A move which has already forced smaller
Asian oil consumers such as Taiwan, Indonesia and Sri Lanka to raise
domestic fuel prices. And now it was the turn of India to do so!
N.Sukumar
Research Analyst
was left with no option but to hike the price of fuel due to soaring
price of crude oil in the global market and asked for "wider political
consensus to adopt more rational economic policies".
“We cannot allow the subsidy bill to rise any further. Nor do we have
the margin to fully insulate the consumer from the impact of world
commodity price and oil price inflation,” Manmohan Singh said at the
annual summit of the Associated Chambers of Commerce and Industry
(Assocham).
“Up to a point we can insulate poor sections of our society and we
have done that. Our government has not raised the price of kerosene in
the past four years. We have only marginally raised LPG and diesel
prices. Even petrol prices do not fully reflect world trends.
"In the case of other national resources, especially water, we have
been altogether imprudent. This situation cannot continue forever. We
need wider political consensus to adopt more rational economic
policies,” the prime minister said.
In view of the above, the petroleum ministry had even proposed to
raise petrol prices by Rs 10 a litre, diesel by Rs 5 per litre and
that of cooking fuel Rs 50 per cylinder to cut losses being incurred
by the state-run firms. But the Left parties had categorically said
they would oppose any move to hike prices of transport and cooking
fuels since the average citizen was already burdened by high
inflation.
However, all said and done, petroleum minister Murli Deora had
indicated that they were concerned at the financial health of the
PSUs, and "there are some measures that are under discussions," he had
told the media.
We should also bear in mind that oil prices have doubled since last
year, buoyed by mounting fears of supply bottlenecks due to robust
economic expansion in Asia and continued supply disruptions in key oil
producers such as Nigeria. A move which has already forced smaller
Asian oil consumers such as Taiwan, Indonesia and Sri Lanka to raise
domestic fuel prices. And now it was the turn of India to do so!
N.Sukumar
Research Analyst
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