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Updated: June 12, 2012 15:29 IST

As petrol price hike triggers massive protests, Congress hopes for a way out

Smita Gupta
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TOUGH ROAD AHEAD: Traffic on Kolkata’s iconic Howrah Bridge comes to a standstill because of a
protest on Thursday against the hike in petrol prices. The Centre is under pressure to partially roll back the increase; but oil marketing companies say the resulting deficit will still have to be made good, by higher subsidies and taxes.
TOUGH ROAD AHEAD: Traffic on Kolkata’s iconic Howrah Bridge comes to a standstill because of a protest on Thursday against the hike in petrol prices. The Centre is under pressure to partially roll back the increase; but oil marketing companies say the resulting deficit will still have to be made good, by higher subsidies and taxes.

Allies not on board; even Congress-ruled States unhappy; Jaipal called back from Turkmenistan to attend EGoM meet

An embarrassed and unhappy Congress, faced with countrywide protests against the massive hike in petrol prices, expressed the hope on Thursday that a way out would be found. “The party is hopeful that some kind of a modus vivendi involving the Central government, the State governments and the oil companies will be arrived at,” party spokesman Manish Tewari said, adding: “We are hopeful that the government would find a way out to provide relief to the common man.”

But with Indian Oil Corporation Chairman R.S. Butola (who took all questions on the issue with the government taking the line it had nothing to do with the price hike as petroleum prices had been de-regulated) ruling out a rollback at the moment as there was neither a “proposal,” nor a “situation” nor indeed had any of the “stakeholders” asked the oil companies to reduce prices, the situation looked grim. Even though he added that if international prices of crude came down, the benefit would be passed on to the consumer.

But as the Congress was wringing its hands, a day after the oil companies announced the highest-ever hike in the price of petrol, the United Progressive Alliance (UPA) government did not get the opportunity to get key allies — the Trinamool Congress (TMC), the Dravida Munnetra Kazhagam (DMK) and the Nationalist Congress Party (NCP) — on board as representatives of all three parties were not present at the thinly-attended Cabinet meeting at 7 Race Course Road, Prime Minister Manmohan Singh's official residence on Thursday. Of course, the Ministers of the three parties, government sources said, had prior engagements: their absence was not to be read as a protest.

In any case, the Trinamool and the DMK had registered their protest on Wednesday, while the NCP, Congress sources said, has sent a message to the party that it needed to discuss the issue. Even Kerala Chief Minister Oomen Chandy, it is learnt, has written to Dr. Singh, asking him to reverse the decision.

Indeed, most Congress Ministers were taken aback by the timing of the announcement of the hike: “We didn't allow the feel-good generated by Mulayam Singh Yadav's presence at the UPA's eighth anniversary celebrations to last even 24 hours,” a senior Minister told The Hindu.

Meanwhile, Petroleum Minister S. Jaipal Reddy was summoned back to Delhi, a day ahead of his scheduled return from Turkmenistan where he had gone on an official trip, apparently to attend a possible meeting of the Pranab Mukherjee-headed Empowered Group of Ministers (EGoM) on Friday. The EGoM might, official sources said, take a view on whether diesel and LPG rates should be revised as well.

Faced with a string of protests on Thursday not just in Opposition-ruled Gujarat, Odisha and Uttar Pradesh, but also in Andhra Pradesh and Haryana, where it is in power, the Congress braced itself for a nationwide protest planned separately by the Bharatiya Janata Party-led National Democratic Alliance and the Left parties on May 31. All that the beleaguered Congress could do on Thursday was to advise States to reduce State taxes which the Congress-led Uttarakhand and Kerala had already done to lighten the burden on the aam aadmi — and to attack the Opposition: while Mr. Tewari pointed out that the NDA, which had dismantled the administered price mechanism during its tenure, had hiked fuel prices more than 30 times, senior Congress leader from Gujarat Arjun Modhwadia tweeted, “Will Gujarat follow Uttarakhand and Kerala in slashing VAT on fuel prices?”

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Quite a few comments here assume that petrol is heavily subsidised. I hope the commentators know the details for, I hear the same story every time the price is hiked, irrespective of the price of the imported crude($140 a barrel or $90 a barrel). The petrol price was lower when crude was imported at $140 a barrel. The tragedy is, the use of public transport also is becoming unaffordable for low-salaried or pension-less senior citizens. We often witness a shameful sight of a senior citizen cycling on a busy city street now. The number of people using cycles has considerably increased in the cities. Prices of food items defy any conceivable logic - Sona rice in Bihar selling at Rs 12-15 a Kg and at Rs 32-37 in Bangalore; Garlic at Rs 20-30 a Kg in Bihar and at Rs 100 a Kg in Bangalore! What are Govts doing?

from:  VMN Sharma
Posted on: May 28, 2012 at 19:50 IST

@Rohit - Well said. This is very much a question of the size of the government and its efficiency. A lot of people forget that the price is artificially high because of the taxes - why should we pay so much taxes to line up the pockets of babus and politicians. Making the givernment work on a smaller budget certainly wont hurt its efficiency.

from:  Varun
Posted on: May 28, 2012 at 15:18 IST

1) there is a lot of secrecy about fuel pricing from the government. At one end the oil companies are paid less than than the cost of fuel and the other the other end consumers pay 2-3 times what the oil companies are paid, with the balance amout as taxation for both the central and state tax. This way the oil companies are always asking for a price hike.

2) Why should oil be taxed higher than than other essential commodities? the taxation on oil is much more than 10-12%. Why should both the cetral and state government tax it?
3) Using public transport is a very good option but the question is the public transport in a condition to bear the burden of that many consumers. Roads are in a mess, busses are pathetic and trains and trams service will make comman man cry. Do you call this public trnasport?
4) by increasing the price gap between disel and petrol are you not promoting people to buy the subsdized diesel vehicles as its cheaper? Why are all luxurious cars diesel powered?

from:  Rohit Khanna
Posted on: May 26, 2012 at 05:27 IST

1.To use local language-Foreign goods don't come at cheap rate.80% of crude is exported.So it is not a poor man's commodity.Also oil is available in limited qty.People need to use public transport 2.Reliance,Shell etc r profiting..Govt should take back these outlets and let Govt get all revenue.Else..a huge ? mark on whom this is intended for. 3.Diesel also should be as per market rate.Car owners need to pay.And if our transporters,middleman,black mrkters,thugs try to exploit situation..strike,incr in price etc..then Govt shld use Retd armed personnel & do transportation to prevent inflation on veg,staple food etc.India..arnd 50% hand to mouth existence and if price rises too much..starvation. 4.1ltr Mileage 45kms means for 5kms it is just 9Rs.DLX Bus carrying 50ppl charges 9Rs-5km.Something is wrong here.Bike provides more mobility,confirmed seat,no waiting time etc.What's the incentive here for bikers to move towards bus.Govt should reduce fare a bit,provide more buses& reduce mismanagement.

from:  Saranyan
Posted on: May 25, 2012 at 23:37 IST

Govt has conveniently put the blame on the weak rupee depreciaition against dollar.But who is responsible for this state of affairs. Is it the common man? Indiscriminate imports and allowing unwanted food industry like Coke, Pepsi, chips, KFC. and the list can extend to cosmetics etc. Every year all these unwanted MNC's are repatriating their profits in dollars and not in rupees. So naturally whatever export earnings are done it gets wiped off by such unwanted imports.
For the last 3years this Govt has been saying that they are determined to bring backthe stashed loot from our country. By this time if they had brought in 50% of the stashed wealth our rupee will be a strongest currency and we dont have to keep hiking petrol or diesel and by and large the common man in India neednt be put to such hardships as they are put into ever since 1980. Let Govt of India and the so called economists bring in the stashed away loot from tax haven banks and spare the common man.

from:  k.gopu
Posted on: May 25, 2012 at 15:49 IST

I feel, the Govt collects high taxes and does charity with our money. Petrol is highly taxed. But at the same time we cannot wash our hands off and say that its the Government's fault. Just have a look at the sales of 2 wheelers and four wheelers. If we consume petrol at this alarming rate, then no one will be able to subside the petrol bills.In the Scandinavian countries, I saw most of the households have cars but they use it only when they are unable to use public transport. They usually travel short distances on their bicycles. Further distance by public transport comprising of trams, metros and buses. Only in case the do not find public transport they use their cars. This practice is worth emulating. Use bicycles, use public transport. Save your money, save the environment. For India to be a superpower we first need to fight such problems with collective awareness and implementation.

from:  Lucky
Posted on: May 25, 2012 at 12:15 IST

Reduce the Govt. spending.reduce the No of ministers in the centre and state.Why do we need a president at all?British ruled the country with less no. of rulers.This is the only way to reduce the taxes.Above all we need sincere national leaders.In the present ministry not even single fellow is sincere sympathetic towards the hardships of the common man

from:  a.k.s.chandran
Posted on: May 25, 2012 at 11:56 IST

Brazil, when faced a similar crisis ,changed half of their sugar factories into ethanol producing factories,which can be mixed with petrol and used in vehicles in a eco friendly way.This method is followed in US too (One should remember the Ethanal 85 - gas stations there).When we adopt this method,we can potentially save our forex,reduce blame on intl crude prices and more over offer fuel at 40rs/litre as well.our farmers will get benefitted - government can very well save the amount of subsidy on the import of petrol too.Native industry will witness seemless growth.But, Why is the government hesitating to find alternative ways like this to curb price rise ???
Why dependent on Petrol ??? why favour investment in KG basin.Why are you lobbying with the rich corporates to pass on the burden to the common man ???

from:  Nithya Saravanan
Posted on: May 25, 2012 at 11:54 IST

Petrol price will rise, what can Congress do? It has no magical stick to curb the prices.
Just i want to remainder the UPA and Congress, whatever you have done in UPA-2 tenure will not be forgotten throughout the life of the suffers.
No a single good work in UPA-2.

from:  Pavan
Posted on: May 25, 2012 at 10:04 IST

It seems that our government advised by Finance minister advised by his team is helping private players like Reliance to make windfall profit by exporting their produce at lower rates and getting us charged at higher rates.Open enquiry into the financial dealings in KG basin is not being done to help these players.

from:  atis
Posted on: May 25, 2012 at 09:46 IST

Agreed Petrol is deregulated -but why have 100% taxes and duty --
suggest to cap it at Rs 15--fixed

from:  rnk.krishnan
Posted on: May 25, 2012 at 09:39 IST

Its not about the hike in the price of a product. What we should
bother about is the taxes that they apply on everything we get or pay.7.5rs rise in petrol will not make much difference. We pay 12% VAT on every goods we buy. We even have to pay 12% for food we eat in the restaurants. whatever we earn as salary after a month long hardwork, is subjected to almost 10% deduction. If we want to save the income tax, we have to take a loan. And ironically, tax will be levied on the interest of the loan only. And now after that unwilling deduction, loan payment, 80C savings etc. whatever little we are left with, if we want to spend that, we will again have to pay tax on everything you spend on. Wanna buy a vehicle, pay tax for the vehicle and the road. And after buying it, again pay tax for the petrol you use. Why is everything so expensive in india? Why does our monthly earning vanishes so quickly? We atleast pay 10%+12% tax on every penny we earn and spend.
What do you say?

from:  krishan
Posted on: May 25, 2012 at 09:27 IST

Within a span of one year, the Congress Government hiked the price of Petrol 5 times. Previously the raise was Rs. 2 and in between Rs.3 But now the raise is Rs. 7.50 per litre and with the inclusion of taxes the price of petrol is raised Rs. 8.50 per litre and this hike is embarassing to each and every body. The hike of Petrol on Vehicles is not only to the Petroleum users, but also, it effects on the entire structure. There must be control on this commodity. If the control is not put on Oil Industries, it is better not to rule the country at present.

from:  rkpraju
Posted on: May 25, 2012 at 09:13 IST

Though I am not a fan of the US , they have hit the nail on the head , by saying
there is zero accountabilty at the level of the beurocracy in this country , which has directly lead to the sinking rupee, insurgency and the many other problems we face.
The time of a second civil disobedience movement is likely to commence if the Lokpal is not enacted quickly. It is the only law which will ensure some accountabilty in the system. The BJP which had an excellent advatage vis a ves the congress on the Lokpal and corruption , has also lost all that people goodwill , as is evident (there are very few takers today for its anti petrol hike street protests), as it was seen as being hand in glove with the Congress in sending the Lokpal to a select committee. Now with respect to prices of oil and gas products , its time Indian auto/bike /car makers bring in new technology vehicles onto our roads, that are fuel efficient with battery back up( so called green technology)

from:  raj
Posted on: May 25, 2012 at 07:51 IST

Hope,left will think twice to support congress candidate for president post after this serious and illegal price rise.

from:  Chanchal Dutta
Posted on: May 25, 2012 at 07:40 IST

What sort of economic management it is where losses if any- on subsidizing kerosene, diesel ,cooking gas and above all to increase revenue on the sly are made good by unaffordable hikes on gasoline only? LPG, petrol, diesel, ATF, kerosene, lube, tar etc all are products of fractional distillation and are separated based on the range of the boiling points of the crude during refining process. At least petrol, kerosene & diesel need to be priced almost at uniform rates if there were no competitive politics. Of these kerosene supposed to be used by the poor seldom reaches the real user but ends up mostly with the adulterators. In the present price of say Rs 80 per litre of petrol roughly Rs 25-30 goes towards taxation only making it a is major source of revenue? Best option should be to remove all controls on the petroleum products and subsidies on kerosene/cooking gas/diesel be given in cash which can be deposited in post office or bank accounts of the affected people in the BPL zone,

from:  Raghubir Singh
Posted on: May 25, 2012 at 07:24 IST

The Congress party is acting like a rudderless ship. The opposition including the UPA II constituents too wants to score brownie points to catch the votes. It is like the Aesop fables story of the Old man, little boy and the donkey going to the market. The basic question is who are the users of petrol? The well to do or the needy? Already prospective users of cars are frenetically booking for diesel engine cars and sale of petrol engine cars is on the decline. The Government irrespective of whether it continues in power or not should put its foot down and go in benefit segmentation of the market as per a predetermined formula so that the needy are not put to hardship. Those who are in the echelons of power are unfortunately looking at their own needs and that of their well wishers (bribe givers) rather than the welfare of the nation. The economics of importing crude oil cannot be wished away and crucial decisions cannot be postponed putting the oil companies in peril of closure.

from:  R.Vijaykumar
Posted on: May 25, 2012 at 06:08 IST

The people of this country will soon show the Congress the way (to get)
out. That is for sure.

from:  K.Vijayakumar
Posted on: May 25, 2012 at 05:44 IST

Why doesn't the government give the citizens of India a complete breakup
of as to how did they reach to the figure of the price of petrol today?
I am sure if the people of the country demand this information from
them, they won't give it because it is only the corruption that goes on
in the middle level administration that is responsible for the fuel
hike. The actual prices of petrol are Rs. 45.

from:  Rugved M
Posted on: May 25, 2012 at 05:34 IST

Lets protest by using bicycle to work or walking to work. Let not use petrol for 1 months. This will save valuable foreign currency and not hurt Indian economy. This will help reduce inflation as well. This will help avoid rupee depreciation.

Bharat Band is not the solution. Petrol band is the solution. Lets see if anyone politician suggests this.

from:  Ashish Gheware
Posted on: May 25, 2012 at 02:24 IST

It is foolish of the government to give in to protest, they should
rather quit. There is no way government can keep the low prices by subsidizing it. Just like politicians people are also become free

from:  Raju
Posted on: May 25, 2012 at 02:14 IST

O.K allies, opposition, "public" ... Which part of this equation is beyond your comprehension? world buys oil with dollars ... rupee is down 10% w.r.t dollar .... oil prices are up due to summer season. ... therefore "deregulated" oil price in India has to go up .. Where is this famed intelligence of my brotheren tripping ... that this equation is not kosher.

from:  Anand
Posted on: May 25, 2012 at 02:05 IST

Butola should answer questions on the LIE,"under-recoveries" from the
Public,and CORRECT the mistakes in his claims.Are the GOI and he

from:  Sadasivan
Posted on: May 25, 2012 at 01:50 IST

It has been always like this, when congress have central government
and NDA are in opposition they do the drama and when NDA were in
power then congress took that responsibility. Although everyone knows
that price of petrol and gold are not determined by india, the prices are determined on the basis of global market(may be not the common man but for sure these parties know this fact).
Why always see bandh as a solution, its not a solution - it's making common man life more miserable. but who thinks for common man, these parties try to grab this kind of opportunities to attract voters. And what do you think when they will come in power than there will be Ram Rajya everywhere, No it will be the same only thing will change then congress will be organizing these bandhs.

from:  G Kumar
Posted on: May 25, 2012 at 01:39 IST

This is politics - pure and simple. We have social objectives like
eradication of poverty, which has not happened, and never will. The
current hike in petrol prices is on account of the rupee falling to a
historic low. The government seems to care little or can hardly
anything about it, thanks to flawed policies that each government has
followed over the last 60 years.
So where do we do? Privatize oil companies and let market forces determine the price? No - that would be suicidal for the government, especially with the "coalition dharma" that Manmohan Singh keeps talking about. Plan B is to keep petrol prices under an artificial control, and raise taxes to take care of subsidies. Plan c would be to print rupee bills by the hundreds of billions, and one day, we can boast of a billion rupee bill like Zimbabwe does (worth around $ 300). Plan D is to declare a financial emergency, and take some unpopular steps to manage the economy, but is anyone listening?

from:  Rama
Posted on: May 25, 2012 at 01:33 IST

So Mr Arjun Modhwadia thinks that the Gujarat state govt, which is in
opposition to the federal govt, should do away with its legitimate
income while an unelected chairman is allowed to hold the country to
ransom and our "aam admi" govt twiddles its fingers?
However I think that the Opposition isn't doing enough. India's heart
are its villages. Till the rural population is enlightened about the
ill-effects of the criminal price hike and their support registered,
the price hike protests just won't burn the govt enough. This hike
won't hurt rural and semi-rural India as much as it'll hurt urban
India, but if the Congress is allowed to get away with this, there's
every chance they'll do it again. Far easier and comfortable to nip
the problem in the bud.

from:  Aritra Gupta
Posted on: May 25, 2012 at 01:30 IST

This is what happens if we try to ape the West blindly. For our country which has limited land and resources and very huge population who needs cheap mode of transport , our Govt should have improved public transport based on Singapore model like Mass Transit trains for local & long distance, buses.Currently we have too many vehicles - cars, two wheelers which are really not needed & causing too much pollution, traffic jams and unwanted drain on common man's pocket to spend for petroleum. Also, Govt should promote and give incentives for alternate fuel vehicles like electric cars and two wheelers.

from:  Ram
Posted on: May 25, 2012 at 01:21 IST

Somewhere in USA probably in Arizona State there is a stone where a note from a Native American is inscribed which says to the effect, " I was crying because I did not have a pair of shoes until I came across someone who did not have his foot.". Dear motorists learn to use public transportation. If you think it is below your dignity to use public transportation I dare say to you it should be below your dignity,if there be one, to ask for a hand out from the public in the name of getting petrol at subsidized rate. Handout is a handout by whatever euphemistic term you may use.

from:  T.S.Krishnaswamy
Posted on: May 25, 2012 at 00:11 IST

Indian citizens are protesting the wrong thing. They are protesting the pimple, when they should be protesting the toxins causing it. Too long have Indians been insulated against global crude prices and forex rates. Oil companies make losses, consumers are ground under globally maximum fuel prices, but the root cause is government profligacy and fat. State and central governments add upto 40 % in taxes to the price set by oil companies. They suck the incomes of the salaried middle class because they are the only ones who cannot escape. Then they throw world beating indirect taxes on us, regardless of rich or poor. Why ? To raise an army of babus, clerks, ministers and others. To do charity with our money. Charity like loan waivers. Charity like Nrega. Charity that is unaffordable. Charity that rarely reaches stated beneficiaries. Charities that win elections by raising false hopes. Protest this ongoing fraud. Do not protest fuel prices. Protest the rob peter and screw paul policies.

from:  C Ravi Shankar
Posted on: May 25, 2012 at 00:10 IST

What obligation does the public exchequer have to subsidize the motoring people ? If motorists cannot afford even the cost of producing and bringing the fuel to the point of use then the motorists should learn to use public transportation. If not they should learn how to stay at home as our moms and grandmas did without complaining ? It is time for the tax paying public to stage counter protests against subsidizing petrol price.

from:  T.S.Krishnaswamy
Posted on: May 24, 2012 at 23:49 IST
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