At Gunpoint

In the line of fire for the recent hike in petrol prices, Jaipal Reddy, Cabinet Minister of Petroleum and Natural Gas of India, has refused to rollback the prices for now. The much condemned price hike comes at a time when inflation is touching double digits, and the move could have a cascading effect on prices. Actually, the situation seems to have gone beyond Reddy’s control. Although ‘harsh and unpleasant’, the huge hike was warranted according to oil marketing companies who have to deal with the double trend of increase in crude oil prices and that the current falling trend was not stable. These companies have lost over Rs 7,100 crore in the last two years despite having the freedom to adjust rates in line with cost, and in April and May this year they lost Rs 2,330 crore.