National Interest: Crude politics

UPA's dismal political management turns a belated (and much needed) petrol price hike into an 'event'

More than two months after the prime minister said we needed to bite the bullet, and a couple of weeks after the finance minister talked of hard decisions, we finally have one: the petrol price increase. Even more encouraging, there is no talk of a rollback yet. Petroleum Minister Jaipal Reddy even showed some old-style political skill in asking people to wait a few days before a price reduction might be considered. Crude has been slowly moderating lately and the oil marketing companies are supposedly free to reset the petrol price on a fortnightly basis anyway.

The question to ask, therefore, is: why have they not been doing that lately? Because if they were, this week's approximately 10 per cent hike would not have become such a story, or rather, event. Before this, the last increase of Rs 1.80 per litre in petrol prices was carried out on November 4, 2011, followed by reductions of Rs 2.22 and 78 paise in the following two fortnights. And then the process stopped. Why? Because, apparently, the UPA was getting ready for the Uttar Pradesh elections. We suspended that fortnightly rhythm in search of cynical electoral gains which never came. Then we waited even longer as nobody wanted to give the silly Opposition a chance to scuttle the Budget Session of Parliament. At the same time, crude kept rising, and the dollar falling, the deficit widened and inflation peaked, so the voter all over the country got angrier anyway. Even at the risk of some over-simplification (but we are talking political governance, not statistical perfection), look at it this way: in the same period, overall inflation has been running at around 10 per cent, and nobody, not even Mamata Banerjee, has been out in the streets protesting. Would anybody, even the voter of Uttar Pradesh on whom this fiscal suicide is being blamed, have noticed?

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