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Reconsidering the move to raise fuel oil price  

| Updated: June 19, 2022 21:32:25


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Despite the runaway price hike of fuel oil in the international market, the government has been selling the item to the consumers at a subsidised price. And as it is causing the public exchequer to bleed constantly, the power and energy ministry is considering a readjustment of fuel oil price. So, goes the argument for a fresh hike in the fuel oil price.  However, the state minister for power, energy and mineral resources told a recent city event that the process of developing a formula is on so that the oil price raise so conceived could be kept at a 'tolerable' level for the consumers including the transport sector. So far so good. But to the general consumers, who are already reeling from ever-escalating costs of living due to the soaring essentials prices, this extra burden of a raised fuel price, said to be at a tolerable level, may not be that assuaging. For they have meanwhile experienced the jolt of gas tariff hike by the government. And before the impact of the gas price increase could be fully absorbed by the public, any added cost burden from fuel oil price adjustment may prove to be the last straw that broke the proverbial camel's back.  

What is of concern here is that any hike in fuel price first increases the cost of movement of goods and services which in its turn sets off a chain reaction in the market. Evidently, that is going to be doubly punishing for the common people. It is worthwhile to recall at this point that following a raise in diesel and kerosine prices by 23 per cent in November last year, there were protests from the general public, while the transport sector called a strike with the demand for increasing transport fare to which the government finally acceded. But the students protested against such hike in transport fare. 

But ultimately, it only pushed the costs of goods and services further up. Now that the government is mulling yet another hike in the fuel price, it doubtless runs the risk of triggering another round of protests by the public and strike by the transport sector demanding another bout of   fare hike. And as it has already happened in the past, the government may again have to yield to the transport lobby's pressure. And, at the end of the day, it is the common people who are going to be the ultimate losers. 

The fact that the state coffer is under great pressure due to the subsidies it has to provide to different sectors of the economy is well understood. This is actually the argument the authorities concerned do often put forward in favour of hiking up utility and energy prices. And in that case, there is assumably an order of priority when it comes to the entitlement of the subsidies. Needless to say, when the general consumers are already battered by price inflation of essentials, they cannot be expected to bear any new cost burden imposed by the government unless there is an arrangement for cushioning them against the extra cost pressure. In fact, that is the reason why the government may have to consider increasing the subsidy further, rather than raising fuel price, so that the common consumers could be protected as well as ensured a smooth supply of fuel oil at an affordable cost. In fine, the government, it is hoped, would reconsider readjusting fuel oil price to avoid another upward price spiral in the market and thus protect the common consumers. 

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