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: By late Friday, India felt less under seige as oil supply at retail outlets started limping back to normal. But the ridiculous position the country had found itself in earlier should teach the policy establishment some permanent lessons. First, the government cannot deal with disruption threats in key sectors by simply hoping that negotiations with protestors will work. Where key commodities like oil are concerned, a serious strike threat means contingencies should be prepared. In this case, the government, as the ultimate employer of PSU oil officers, should have told strike leaders that supply points will be manned by others—maybe the army—and that any effort to prevent such arrangements would be met with force. If the government wants to coddle PSU employees, it will produce the kind of crisis India saw for two days. What this says about a trillion-dollar economy’s management capacities is another question that should worry the government.
But the more important lesson is that as long as there’s a near-government monopoly in downstream and upstream oil sectors, there will always be such threats. Oil privatisation was buried by the NDA after the HPCL sale controversy and the UPA, of course, wouldn’t hear of it. Now, oil PSUs are justified in the name of price fixing that produces its own huge and well-known distortions. India’s public sector bank unions now know that their strike threats do not shut down daily finance because there are private banks. BSNL and MTNL employees know that a long strike will see millions of consumers migrating to private service providers. The same holds for LIC and GIC unions. Oil economy disruptions really affect the aam admi. So, the political class should know the costs of cosseting a public sector oil sector. The argument that market pricing will be unpopular is easily countered by pointing out that the government has the option of directly subsiding petro commodities like kerosene, ensuring that such help is well-targeted. As for the demands that started the strike, this newspaper is all for government employees being paid well. But the fact is, oil PSU officers are already paid well by industry standards and they have job security that the private sector doesn’t. One of the comments today on these pages pointx out that oil refineries are among India’s more efficient industrial activities. Union strong arm tactics shouldn’t find a place in this.
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