Monday, June 23, 2008

Adverse political implications of petro price hike unlikely

by Jo Black

Unlike in the past, over 90% of CEOs interviewed by the apex industry body- the ASSOCHAM - on the hike in petrol and diesel prices offered virtually no resistance, but the common man on street feels ignorant about exorbitant crude oil prices in international market and is of the view that increase in LPG cylinder price is on higher side.

However, ASSOCHAM fully supports the government decision for raising prices of petroleum products in the interest of the country.

The survey named – The Fall Out of Hike on Petroleum Product’s Prices - in which 300 CEO’s opinions was sought and the views of 400 people from the streets, were also sought, found that 270 CEO’s said that the government delayed price hike beyond a point.

This resulted in oil companies in downstream sectors to go into huge losses, they added.

Releasing the survey, the ASSOCHAM President Mr. Sajjan Jindal said that the price rise was welcomed by the thumping majority of CEOs, and almost 100% of people from the streets appeared ignorant about crude oil prices skyrocketing at 135$ per barrel.

This lot of consumers held that LPG consumers should have been spared by a bit, as Rs. 50 ($1.25) per cylinder hike came to them a big shock.

It is because it was never done in the past and the masses had expected a hike of not more than Rs. 20 ($0.5) to Rs.25 ($0.62) per cylinder.

Mr. Jindal further said that 10% of CEOs i.e. numbering 30 said that Rs. 5.00 ($0.12) petrol hike per litre in one go should have been avoided and the prices of diesel per litre should have been raised by around Rs. 2 ($0.05) as the higher prices of diesel would have a cascading effect on the entire Indian economy in view of its demand and even moved prices of essential commodities.

On the issue of political implications of petro price hike, over 200 CEOs held that the results of forthcoming assembly elections in state of Rajasthan, Madhya Pradesh and Chattisgarh would not be influenced by the hike although political parties would take maximum advantage of running down the UPA government on the issue.

This will happen because the issue of the petrol price hike has been so over emphasized in the media as “Aam Aadmi” had accepted that he or she would have to be part of the system to bear the brunt of petro price rise.

About 40% of CEOs have disagreed with this view and said that political implications would arise out of this petro price rise and even curb the possible anti–incumbency factor to a certain extent in the forthcoming assembly elections.

A few CEOs held a view that the UPA government should build a consensus among large number of countries with which it has sound bilateral and multilateral ties to put collective pressure on oil producing countries not to allow crude oil price beyond a limit in the absence of which the revision in petro prices would have to come almost every quarter, concludes the survey.

 

 

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