As far as I think, petrol price hike should not always be an unwelcome decision, though in this case I would prefer to think otherwise. The decontrol of petrol prices was a logical decision. It follows the principle that the user pays. Petrol is anyways consumed by lower middle, middle and upper classes. So the user pays philosophy is tenable in this case for the simple reason that one who uses/consumes should pay up and the government revenues meant for the poor and downtrodden should not be used to bail out the oil companies’ losses on account of selling petrol. Also this would prompt a lot of people to use public transport and reduce carbon emissions ultimately leading to a situation when we have good public transport system in all big cities and India’s reduced import bill. I am not day dreaming till yet!!

So why in this case the petrol price hike is unjustified? For the simple reason that this hike has come at a time when the international crude prices are relatively stable in dollar terms for a while now. So the question of increasing the domestic prices vis-à-vis the increase in international prices is invalid. The reason behind the oil companies’ under-recoveries is that the rupee has plummeted against the dollar to its lowest levels in the history causing the imports to become costlier. Assuming that 50 Re per dollar is a safe level; we are losing 6 re per dollar because of rupee sliding to 56 against the dollar. Thus, a simple translation into 6 re hike in petrol prices. In absence of it, the hike would have been just Re 1.5.

So why is the Rupee going down? Well the simplest answer is policy paralysis of the government. The other one is the decadent politics of the country. Today the situation demands a complete overhaul of the system. New constitution, new democratic system, new IPC, CPC, CrPC and a new government run by literate, honest and experienced professionals. JAI HIND.