Oil pricing decision comes back to haunt govt

Font Size

Print

Feedback

Email

Discuss

Related Articles

Fuel prices to be rolled back if crude dips: DeoraNo oil price hike immediately, says Deora

New DelhiMumbai: Whereas striking oil company executives are adamant that record losses to their companies from fuel subsidies cannot be a reason for giving poor pay hikes, truck operators are standing their ground demanding a cut in diesel prices. Though the government claimed on Thursday the situation is still manageable, and some states have invoked the Essential Services Maintenance Act to get truckers back on the road and oil executives back in the office, commodity prices could start moving up soon. “If the strike continues for long, it would build pressure on us and there is very little that we can do (to keep price in check),” Reliance Retail president & CEO (operations & strategy) Raghu Pillai told agencies.

The problems stem from the government’s ill-considered volte-face on developing a fre e market regime for petro-products soon after it came to power in 2004. The then petroleum minister Manishanker Aiyar said the plan stood rolled back. As the government now faces the prospect of rising prices nullifying its inflation control plans, the roll back is proving very costly. If the government cuts prices on diesel now it would benefit the truck operators but would hurt the bottom lines of the oil companies even more.

Surprisingly surface transport minister TR Baalu hasn’t uttered a word since the transporters’ stir began four days ago. Speaking about the impact of the strike, additional secretary in the petroleum ministry S Sunderasan said, “Some shortages can be there but the situation is under control.” He also said petrol pumps were running low on inventory in anticipation of a petrol and diesel price cut. Government has roped in senior management personnel, along with Territorial Army at airports, to refuel airplanes. President of the striking Oil Service Officers Association Amit Kumar surfaced on Thursday after two days of hiding. He held talks with company management on their demands for higher wages. But the talks failed as the union insisted that the government accept their demands, according to chairman & managing director of IOC, Sarthak Behuria.

“We said we can do nothing on their demands (for large hike in pay) since a high-level ministerial committee headed by home minister P Chidambaram has already been formed and it will give report in 30 days. But they didn’t budge,” Behuria said.