Is the steep hike in the prices of petro-products justified?

Is the steep hike in the prices of petro-products justified?

No, certainly not, it seems as if the common man in being taken for a
ride by the Government. It is presenting a totally different picture
of the reality. The petroleum companies are certainly not suffering
any kind of losses as the Government is trying to project, as the
companies have never come forward stating their losses. The former is
stressing about the under-recoveries but what kind of under-
recoveries are not specified.

All around the globe the petroleum companies are minting money even
after the hike in the prices of crude oil, eg, BP, Exxon and Shell
have made billions. Then why should we pay more for our transport and
cooking gas, as the Government has lifted its control on the companies
and has given them the liberties to fix prices of fuels on the basis
of market forces- of state controlled prices of petrol?

The reason evident of dismantling Administrative Price Mechanism (APM)
is obviously not aimed at the profits of the Public Sector Companies,
which are nine in number, but for the private oil companies who find
it hard to compete with the tight budgeting of PSUs. This apparently
can be said to be the after-effect of the agreement between the two
feuding brothers’ oil-companies. Their retail outlets were in a state
of fix because of PSUs maintaining just prices.

The hike in the prices of the petroleum products would mean increase
in the prices of other goods, that would push the existing inflation
rate of 10% even higher. It would further add to the costs of other
commodities like- cement, metals, other consumer durable items, hotels
etc. The concerned companies have to bear the burden as they cannot
immediately increase the prices on the commodities. This would make
the poor consumers have a fit. However in the end the consumers will
have to bear the brunt.

Dr. Medhavi Chourey