The United Front steering committee will today witness a Prime Minister torn between economic realities and political compulsions propose options to tackle the burgeoning oil pool deficit which has already crossed Rs 19,000 crore.
As things stand, it is unlikely that the steering committee will arrive at a consensus on the highly contentious petroleum price hike issue given the volatile political situation in the country with almost all the major parties pulling in different directions.
The Congress is the latest party to jump on to the anti-price hike bandwagon. The party, in its economic resolution at the 80th AICC plenary in Calcutta, categorically stated that it would not support a temporary and stop-gap move to balance the oil deficit equation.
A mere ad-hoc increase in prices cannot provide a lasting solution to the depleted petroleum sector. The matter needs to be viewed in its totality, the AICC resolution had said.
The AICC views with concern the stunted growth of the strategic petroleum sector, associated with equally worrisome large accumulated imbalance of oil economy. Capacity addition in oil refining industries can materialise within a predictable time-frame and is essentially a function of mobilising requisite investments, the resolution added.
The resolution seems to have virtually scuttled the United Front governments proposal to raise the prices of petroleum products on August 16 as announced by Prime Minister I K Gujral at a recent meeting convened by the Confederation of Indian Industries (CII).
The main opposition party, the Bharatiya Janata Party, has already announced that it is was opposed to any price increase.
The Left parties yesterday indicated that they would not climb down from their position on the issue. Both CPI general secretary AB Bardhan and CPI(M) politburo member Sitaram Yechury said they would continue to put pressure on the government not to take the easy option of raising prices.
Unless there is package of reforms concerning the oil industry, both long term and short term solutions to the present crisis will not work, Bardhan said.
However, both the leaders admitted that something would have to be done as the oil industry was facing a crisis following repeated postponement of a decision.
However, the business community wants the government to take an early decision on the issue to end the uncertainty over the
issue of raising petroleum prices. The CII has also appealed to the steering committee to take an urgent and clear decision on the matter of pricing of petroleum products which is pending for some time now.
