Inflammable!

The issue of price hike for petroleum products has become as inflammable as the petroleum products themselves. A coalition of 13 student unions aligned with as many political parties in parliament has given a 24-hour ultimatum to the government to revoke the price hike and called a Nepal banda for January 25 if the government fails to meet their demands.



The Association of LPG Dealers has also demanded that the price hike for cooking gas be taken back. Petrol stations have begun to charge an additional 70 paisa per liter as a commission and the government has threatened to revoke the license of such stations. Minister for Supplies Lekh Raj Bhatta has taken the stance that the government will not give in to any pressure tactics and will stick to the newly-hiked price structure.



As painful as the price hike is for the general public, especially the working class that lives on daily wages from meal to meal, there is also no alternative to it. When the international price of crude reaches as high as US$ 113 per barrel, there is no way poor countries like Nepal can continue to subsidize petroleum products. Poor countries across the globe are bearing the brunt of the price hike and Nepal and the Nepali people are no exception. There is no pragmatic, viable alternative to the hike. A blanket subsidy on all petroleum products would mean the state subsidizing not just the poor but the rich as well, whose per capita consumption of petroleum products is disproportionately high.



Why should the state subsidize rich individuals who drive personal vehicles or middle-income families that use LPG to cook their food or five-star hotels where LPG fuels their gigantic boilers? Some people suggest that the state should segregate the consumers, impose dual pricing and make the rich and the poor pay different rates. That’s easier said than done. Otherwise, the oft-repeated promise to issue ration cards to the underprivileged made by different governments each time there is a hike in petroleum prices, would not have remained unimplemented. The loopholes that dual pricing will create are un-pluggable and will lead to the creation of a pervasive black-market.



The student unions should, therefore, call off their banda, come to the negotiating table and suggest viable alternatives, if there are any, to alleviate the pain inflicted on the public by the unprecedented fuel price hike. We also disagree with the student unions’ demand that students should get petroleum products at a subsidized rate. Students are not a special class, not all students are poor and there is also no guarantee that such a subsidy meant to assist students from underprivileged families will not be misused. We further think that the political parties, including the Nepali Congress, are acting opportunistically in protesting the price hike when almost all of them had raised those prices in the past when they were in government, and would have raised them again if they were in power now.



Petroleum price hikes are painful but unavoidable when the price shoots up in the international market. Let’s accept it as a fact of life and not try to score cheap political points.

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