12 April, 2021

Respond, But Intelligently

The government must look at innovative ways to soften the fuel price hike

Respond, But Intelligently
The recent hike in prices of diesel and petrol had been anticipated for weeks. By the time it happened, the public was, to some extent, conditioned to accept the decision. However, a single move such as this

cannot remove the politics embedded in oil product prices. It is, thus, hardly surprising that the political parties of the Left and others have taken to the streets, protesting the move. The Centre has countered this by convincing some of the Congress-led governments, Maharashtra and Delhi, or allies in Andhra Pradesh and Tamil Nadu, to reduce state sales tax and soften the blow. Others are set to take similar steps, allowing the Centre to not roll back the increase it announced and yet show responsiveness to the consumers' interests. The average consumer would no doubt find the increase inconvenient, but the government had no choice, given that global oil prices have been hovering in excess of $70 per barrel in recent weeks.

To assess the recent step, it would be necessary to look at developments in recent years relating to...

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