Revealing balance
PremiumStill, we need clarity on the decision space of state-run businesses in this sector. Else, we may simply have to give up on the project of its market orientation.
Chief economic adviser V. Anantha Nageswaran has said that the burden of high fuel prices will have to be shared by the government, oil marketing companies and consumers if global crude oil prices remain above $110 a barrel for more than a quarter. This suggests an attempt to balance everyone’s economic interests out. More importantly, it perhaps lays bare the role the government plays in regulating fuel prices, even though it does not officially acknowledge having a say in it.
There have been numerous instances where central control of retail rates has been apparent. But Nageswaran’s statement, while allaying fears of even steeper hikes and explaining their necessity, was as close to an admission of directed fuel pricing as one could expect. This is not to say that our state-run oil marketers should not pick up some of the tab. While they are answerable to all shareholders, including minority ones, they must also keep the bigger picture in mind. Inflation acts as a regressive tax and fuel flare-ups are a major cause. Still, we need clarity on the decision space of state-run businesses in this sector. Else, we may simply have to give up on the project of its market orientation.