Why Blame the Government?

  • SumoMe

Our country is going through its “mid life” crisis these days. Being a developing nation, it becomes difficult for us to manage our internal problems. As if the rising inflation of over 8 per cent was not enough (wish our GDP had been going through that scale), the price hike in commercial oil in the international market was the last straw that broke the petroleum industry’s ever so heavy back!

True to pakka Indian ishtyle, we have blamed, cursed and held the government liable for everything and anything which goes wrong under the sun. But really, we should spare some time to analyze if our government is really to be blamed.

There was almost a mutiny in the country due to the hike in petrol, diesel and cooking gas prices by the government, but has anyone cared to see why this was done?

The state owned petroleum companies, namely Indian Oil, Bharat Petroleum and Hindustan Petroleum, were incurring losses close to Rs. 650 crore per day on sale of petrol, diesel, domestic LPG and PDS kerosene – all due to subsidization. Suggestions were floated around to cut down on the losses by decreasing the import taxes levied on crude oil, but in doing so, the government would have been out of money to buy crude oil – let alone subsidize it. Although the hike seemed steep (Rs. 5, 3 and 50 for petrol, diesel and LPG gas respectively), it is still marginal in comparison to the rest of the world as a barrel of crude oil costs an upward of $130. A quick comparison with the rest of the world would give us an insight of the international market.

1.Turkey: Rs 113.30 per litre
2. Norway (Oslo): Rs 112 per litre
3. United Kingdom: Rs 95.50 per litre
4. Hong Kong: Rs 84.10 per litre
5. Brazil (Sao Paolo): Rs 66 per litre
6. Canada: Rs 57 per litre

Therefore, for petrol in India to be costing around Rs. 51 a litre – the government has only taken the necessary step. Even the steep rise in the cost of LPG has been met by the state governments who have promised to share the extra burden of the consumer. The government already subsidizes Rs. 50 on every cylinder we purchase.

It is high time that the government reconsiders its options on alternate sources of energy like nuclear, hydro solar etc to meet the demand for fuel for our nation.

The rising oil prices have also hit our inflation( a further increase of .5 per cent) which is another area our policy makers need to look at. The price of food grains have gone through the roof and don’t seem to fall back! While we may cry hoarse over the oil prices, we should spare a thought for a poor as well. Like my maid stumped me the other day when asked about her take on this whole episode – “Hamaein petrol se kya karna, humein roti chawal hi mil jaye who hi bahut badi baat hai” (what do we have to do with petrol, it’s great just to get food). Well, that is a grim reality which we seemed to ignored, isn’t it?

Abhimanyu Singh

[Image Source:http://www.flickr.com/photos/quiescent_rotation/411883105/]

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