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Government advertisement justifies fuel price hike
Published on 27 Jun. 2010 11:17 PM IST
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The government Sunday released a large advertisement titled, “A small price to pay today... For a better tomorrow”, justifying the recent increase in fuel prices.
The hike has already invited protests and demonstrations by ruling alliance partners and opposition parties. The empowered Group of Ministers (eGoM) Friday agreed to the decontrol of price of petrol, which meant an increase of at least Rs.3.50 per litre in most metro cities. The government also hiked the prices of diesel by Rs.2 a litre, kerosene by Rs.3 a litre and cooking gas by Rs.35 per cylinder.
On Sunday, a typical large half-page advertisement in some national papers by the Ministry of Petroleum and Natural Gas had the title, “A small price to pay today... For a better tomorrow”. It said that even after the price increase, the government will bear a “burden of Rs.53,000 crore during the year”. This was a reference to the under-recoveries - the industry jargon for the losses suffered by oil marketing companies for selling fuel products at fixed, subsidised rates.
The advertisement had a table showing the comparative costs of cooking gas or LPG and kerosene in the neighbouring countries, with that of the fuel products in Delhi.
For example, Sri Lankans have to pay Rs.782 per cylinder of cooking gas and Rs.39 per litre for kerosene. This is much higher than the revised rate of Rs.345 for LPG cylinder and Rs.12.32 for kerosene in Delhi.
“Eighty percent of the country’s requirement of oil is met by imports. This naturally impacts prices due to volatility in international oil markets,” said the advertisement.
The Left-run states of West Bengal and Kerala observed strikes against the fuel price hike. Allies like Trinamool Congress and DMK expressed their unhappiness, especially as their states are set to go for elections next year.
The principal opposition, Bharatiya Janata Party (BJP) also held demonstrations across the country against the fuel price hike.
The ruling Congress supported the government, stating that there was no option but to raise prices in the wake of unsustainable under-recoveries due to rising international crude prices.

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