India Insight

It’s time India bites the diesel bullet

“81 rupees?” asked an astonished TV anchor when an irate Bengaluru-based consumer called in after the recent 7.5-rupee hike in petrol prices. Perhaps cars that run on milk are now needed, the anchor suggested — when the caller said the dairy product costs around 30 rupees a litre.

While milk-powered automobiles might be a distant dream, the reality remains that those relying on petrol vehicles will now need to do their budgeting again. If a falling rupee and high inflation were not enough, this steepest-ever rise in petrol prices will surely pinch.

The fact remains that petrol prices were decontrolled way back in June 2010. That move gave oil marketing companies (OMCs) freedom to revise prices and also gave the government some saving grace as ministers can now easily say that petrol prices are market driven.

Though the government cannot be blamed for this hike on paper, they do manage to influence OMC decisions. That is indicated by the fact that this hike comes after state elections and a day after the parliament’s budget session got over.

However, it is tough to understand why the government would allow OMCs to raise petrol prices, given the move will not help improve the fiscal situation as the government doesn’t subsidise petrol. It is the subsidy burden of other fuels that strains the government’s finances.

Fuel price hike: Reactions from the common man

The government raises petrol prices by 3.5 rupees/litre and decides to make them market-determined. Diesel gets costlier by 2 rupees/litre and cooking gas by 35 rupees a cylinder.

Reuters spoke to people in the streets of New Delhi to get their reaction.

PANKAJ (senior manufacturing analyst, GM motors)

ANUBHAV SRIVASTAVA (member, RTI foundation) 

DISHITA (freelancer at an ad agency)

GAURAV (a student)

(Flip cam videos by Rohan Dua)

Playing politics over fuel price hike?

INDIA/For the first time in parliamentary history, the entire opposition led by the BJP walked out during the Finance Minister’s budget speech.

The walkout was to protest against the hike in petrol prices.

The opposition is saying the government move adds to the burden of the people.

However, the united front put by the fractious opposition also hints at some pre-planning by the opposition leaders.

Was this reaction justified?

Shouldn’t the parliamentarians have stayed back and argued the point in the House?

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