Mamta's fuel hike 'protest' is hypocrisy

Didi a compulsive populist, says UPA minister

Sanjay Dutta TNN 06.11.2011

New Delhi: Unfazed by her pullout threat, a UPA minister hit back at Mamata Banerjee and BJP on Saturday, describing their opposition to the petrol price hike as “political hypocrisy”. 
    The senior minister, who is part of the Cabinet group on fuels, shrugged off Mamata’s threat as a manifestation of her “compulsive populism”. “She was a member of the GoM that freed petrol pricing from government control in June 2010. As is her wont, she did not attend the meeting but her consent was taken,” the minister said, insisting on anonymity. Fuel price hike was inevitable: UPA minister 
New Delhi: The UPA minister who called Mamata Banerjee a “compulsive populist” said the government was compelled to allow oil companies to raise prices because of their precarious financial health due to a “double whammy” of rising crude prices and weakening of the rupee. 
    “It is not that the government is running for a Nobel for unpopularity. It does unpopular things only when it becomes inevitable...oil’s price and the dollar’s value are not in our control. Who would have thought that the US economy would shrink but dollar and oil would become stronger? How much politics can you accommodate?” 
    However, the minister conceded that given the political heat generated over petrol, it would be difficult for the government to raise diesel, cooking gas and kerosene prices anytime soon. The government directly controls the price of these fuels and the ministerial panel on fuels was expected to meet shortly for taking a call on raising their prices. 
    Reacting to BJP’s description of the petrol price hike as “midnight deceit”, the minister said that party’s government in seven states was indulging in “daytime robbery” by taxing petrol heavily. “Even Mamata’s government charges 26% tax against 20% levied by Sheila Dixit’s government in Delhi. The Centre has sacrificed customs on crude and excise on petrol. If they are so concerned, why can’t they reduce their VAT? If the price is going up, they are benefiting 
    The minister said people needed to understand that the oil companies are expected to lose Rs 132,000 crore because of keeping prices low even when oil and dollar prices are rising. “Despite Rs 15,000 crore dole, the oil companies have posting losses. Overall, the government may take on Rs 50,000crore-Rs60,000-crore burden. Where will this come from... maybe from tax on people? Even then, who will pay for the rest? If the FM were to subsidize the whole (losses), the fiscal deficit target will be exceeded and India’s sovereign rating will be downgraded. That will be catastrophic for the country’s economy.” 
    Justifying the timing of the petrol price hike, the minister explained: “Any student of economics would tell you that diesel prices need to go up. LPG (cooking gas) and kerosene too need to go up. Crude makes up 90% of the cost of producing fuel. We don’t produce enough crude and import almost 80% of the commodity. It is bought in dollar. If both become stronger, the option is either you reduce fuel production or raise prices.”