Oil's not well

The government finally went ahead and did it – announced a hike. Sadly, it was not a salary hike – but a hike in fuel prices. It was always an imminent move given the steep rise in crude oil prices in the international markets in recent times. The only consensus about oil prices right now is that they are not about to come down any sooner in the near future. The first reaction of anyone to the hikes would be to scream "Not fair!" – but a closer look at the details helps one see the bigger picture.

Let’s face it – the losses being incurred by oil companies in India have been to the tune of Rs.2,00,000 odd crores. If the fuel prices in Indian markets were not hiked now, then the companies would have, sooner or later, run out of money to buy crude and then the country would have – literally - come to a halt. As a matter of fact, these hikes – if anything – are only providing only temporary and partial relief. We need to realise that even with these hikes in place, these companies are still making a loss.

Agreed that the price rise might boost inflation further, which is already rocketing upwards to new all-time highs - but inflation control is to be chiefly done through the proper channels and by the right institutions. One solution could be to let rupee have a steady rise against the dollar, which would counter the rising oil prices. Another option could be to harden interest rates – with a healthy GDP growth rate, this would actually be considered a calculated risk. Shifting focus from inflation solutions, let’s acknowledge the fact that the government at the Centre, on its part, has cut taxes on fuel and a few Left-ruled and Congress-ruled states are already following suit. Most factions are chipping in to deal with the problem – then why should the common man be left behind – this question surely deserves a thought.

Meanwhile, amidst all this turmoil, to watch political parties of the Opposition resort to good, old opportunism – is to watch a repeat telecast of the blatant misuse of democracy. The mindless and hasty strikes called by the Opposition do not – in any way – reflect remotely reasonable sensibilities. The strikes organised across few states is only for protesting against fuel hike – no party involved in these strikes has come forth with an alternative long-term solution to the crude oil crisis facing the nation currently. My question for these parties is that when the country imports oil, shouldn’t it pay the prevailing international price? Shouldn’t the nation as a whole bear the burden of price rise?

To cut a long story short, this "oil shock" – as some are calling it – is here to stay and we better get used to it. Let’s face this long-known, well-ignored fact atleast now –all’s not well – rather – oil’s not well.