Fuel for Thought

If the Left had been around, a Rs 5 petrol hike would’ve been unlikely

This was Finance Minister Pranab Mukherjee’s explanation for his inability to do anything after petrol prices went up by Rs 5: “In June last year we had taken the decision to decontrol and deregulate petrol prices. So nowadays, the decision to raise or reduce petrol prices is not taken by the Government. This decision is taken by oil marketing companies.”

Let’s assume the statement is true. There is then only the small matter of the timing of the hike. Consider the sequence of events. The price of oil started rising from 2009 onwards from a low of $40 per barrel. In the last 11 months (in Mukherjee’s words), it went up by $42. And yet, oil marketing companies allowed themselves to bleed litre after litre of losses. Five state governments went to the polls, the results came out, and immediately a Rs 5 hike was announced. This is a remarkable form of decontrol. Perhaps the Finance Minister can explain: If the decision has been left to oil marketing companies, then by what economic logic did they, who have nothing to do with politics, wait for the elections? Answer: the Government told them to wait because hikes cost votes, and like decontrolled sheep, they obeyed.

The petrol price hike is directly connected to another phenomenon—the defeat and weakening of the Left in India. Their presence in the last government ensured that price hikes were not a unilateral order, but arrived at through negotiation. Their drubbing in the Lok Sabha and Assembly elections now has an interesting irony built into it. The rich really don’t care if the price of petrol goes up by Rs 5 and the poor don’t have cars. The present hike only affects the middle class. But when West Bengal and Kerala threw them out, the middle class exulted. It still does not realise that the Left has for a long time inadvertently championed the middle class’ cause. When they resist labour reform, it does nothing for poor unorganised labourers but gives protection against arbitrary sacking.

Yet, instead of desiring a strong Left, the middle class is swayed by mirages such as 8 per cent growth, which offers them nothing. They can afford an MP3 player, but a decent house is already out of reach. They can buy a car on EMIs, but have no money for the petrol that will take them to office.

About The Author

Madhavankutty Pillai

Madhavankutty Pillai has no specialisations whatsoever. He is among the last of the generalists. And also Open chief of bureau, Mumbai  

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