Wrong Timing for the price hike

On June 28, 2010 · In General, Government, views

Whatever justification the Government may have had to decontrol petrol pricing to allow market conditions to rule things, there is a little doubt about the wrong timing of the act. Diesel is to follow the suit soon. Liquid petroleum, Gas prices, too, has gone up by Rupees 35 per cylinder. And the common man, already burdened so heavily by continually rising prices for the past one and a half years, stands almost totally floored by this recent step. Hence the nationwide outcry against the ill-timed move by the Government.
That petrol prices will be decontrolled, has been in the air for long. The Government had gone close to doing it two or three times in the past one year after the Lok Sabha elections, but did not quite do it. Now, however, it took the big step and led to an explosion of public sentiment against itself. With hikes in petrol, diesel, and LPG prices, the country will experience a new high in the back breaking inflation daunting the people for quite some time.

photo credit: Sam Felder

Market conditions will now decide the pricing of the petrol products. In essence, the prices will keep rising as per the international trends. In that case, if the international trends are showing a downward motion in prices, Indian prices, too, should reflect those. Yet, the overall Indian experience is that prices never go down; they only keep going up. Does it then mean that the common Indian man will keep paying more and more for petrol, diesel, or LPG all the time? At least, that is the popular perception�. And it is mostly true�
The Government�s justification for decontrol may be right. For how long can a nation keep suffering from the mind boggling subsidy burden on so few times? Some day, therefore, decontrol of petrol prices was to take place. Yet, at this precise moment, the nation is just not ready to accept any more burden since it is reeling under the terrible burden of rising prices for the past some time.
Had the Government sensed this, it would have avoided taking the decontrol decision at this moment of time. Before touching the petrol products, the Government should have taken specific steps to control inflation, succeeded in those efforts to a marked extent, and then thought about petrol product priced. Instead of doing this, the Government chose to get going with the decontrol decision. In the process, it hurt the sentiment of the already troubled common man whose monthly budget will not shoot up beyond imagination, nation�s misfortune!