Oil price hike: Cong talks of a reformative approach

Posted By: Pti
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New Delhi, Feb 6 (PTI) Even as government is expected tocome under pressure in the wake of rising international oilprices, Congress appeared to be taking a strikinglyreformative posture on the issue of petrol prices.

The party has disfavoured government taking on theburden of petrol prices, noting that it "may not be soundeconomics".

"It may not be sound economics to keep on taking theburden for petrol prices while there is an ever increasingdemand for petrol vehicles," party journal ''Congress Sandesh''said in its latest issue.

But only a few days ago, Finance Minister PranabMukherjee only promised to "take care" of impact of USD 102per barrel price on domestic retail prices.

In its editorial piece, the party mouthpiece noted thatthe government has decontrolled the price of petrol while itstill provides subsidy for diesel and cooking gas. It alsoadmitted that UPA''s "greatest criticism" comes on the issue ofprice rise.

''Congress Sandesh'' took the view that the increaseddemand for the vehicles was because of the "increasedaffluence" of the middle class.

The journal said among the "greatest criticism" faced bythe government today is the rise in prices. "No doubt enhancedprices affect the budget of one and all. The greatest effectis felt by the poorer sections of society."

Stressing that some of these happenings are not of thegovernment''s doing, it said the ever-rising prices ofpetroleum products is due to the increase in crude pricesinternationally.

"Prices can only be kept lower by providing subsidieswhich would deprive the government of resources for otherdevelopment projects," it felt.

As against this, Mukherjee while voicing concern overworld oil prices touching a 28-month high of USD 102 a barrel,had promised to "take care" of its impact on domestic retailfuel prices.

"Unfortunately, developments in the Middle East and itsimpact on the Arab world is causing uncertainty about (oil)production (and) about (its) availability. We are watching thesituation (closely)," Mukherjee had said.

The spike in global rates has meant that the gap betweendomestic retail fuel price and their cost of production haswidened, necessitating action -- either by way of priceincrease or hike in government subsidy.

On the hike in the prices of certain food articles andvegetables especially onions, the Congress Sandesh said theaffected common man is not concerned as to who is to blame andis concerned about making both ends meet.

It said the centre is seized of the matter and is doingall under its control to bring down the prices.

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