Backsliding on oil

Moily's forcefitting of ministerial decision to poll calendar underlines UPA irresolution on reform

It should be a textbook example of how not to govern. In a clear case of plucking out of thin air impediments to routine administration, Petroleum Minister Veerappa Moily last week ordered that the nominal monthly increase in diesel prices be put on hold. Just this year, in January, the Central government had permitted oil companies to incrementally rationalise prices. Details of how fast oil companies could move to raise prices in order to address their operating losses were left unclear. But the move was a welcome shift in the right direction. Moreover, the fact that a gigantic backlash did not materialise was seen to be a positive signal that would counsel the UPA government to hold its nerve, and carry forward from this baby step towards a more rational, market-linked discovery process for fuel prices.

Such optimism obviously did not reckon with the petroleum minister's determination to insinuate his ministry's role in a state election where it need not be a factor. As reported in this paper this week, Moily personally intervened to make sure that diesel prices are not raised for the month of April, indeed till polling takes place in Karnataka on May 5. Karnataka is Moily's home state, and his exuberance in forcefitting his ministerial decisions to the electoral calendar in the state is, by all indications, a bid to win brownie points from his party. The abeyance in the diesel price hike may or may not influence the poll outcome. In fact, it would require a petty reading of the voter's mind to believe that a vote could turn on this nominal handout. But whatever the returns for the Congress in the Karnataka assembly, Moily could claim to have chipped in with a unique contribution.

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