Given how the brief strike by state-owned oil sector officers raised the spectre of a fuel drought across the country, the government deserves to be congratulated for deciding to take tough action and threaten to arrest striking officers, since this is what finally broke the strike. The fact that the emoluments of some of the striking workers were made public didn’t help their case either, since these showed the managers to be amongst the better-paid in the public sector. But while the government did the right thing in finally acting tough, it mishandled things in the run-up to the strike. For one, whenever there has been a call for a strike, and it is made weeks in advance (trade unions and officer associations need time to mobilise), petroleum dealers stock up on supplies. They did not do so this time because Petroleum Minister Murli Deora had held out the prospect of a price cut for petroleum prices. No petrol and diesel retailer in his right mind would stock up when prices are set to fall. So, if Mr Deora felt politically compelled to make his announcements, surely someone needed to tell the dealers that they would be compensated for their losses in case they bought additional stocks, or that there would be no price cuts during the strike and its immediate aftermath.
While the immediate cause of the strike was that the salaries and wages notified for the oil sector were lower than those recommended by the Justice MJ Rao committee, the basic demand that wages be revised every five years instead of the current 10 years has been a very old one. A pay revision every five years is not an unreasonable demand to make, especially when private sector salaries rise almost every year, and the argument that government salaries are revised once every decade is no argument. The oil industry’s dynamics are quite different from those of the government. In any case, Ram Naik as petroleum minister in the NDA government, had conceded this demand. So while it is true that the oilmen didn’t wait for the one month that the government asked for while a group of ministers tried to find a solution, they were probably at the end of their tether since years have passed since the ministerial promise.
The nation would not have been held to ransom by the strikers if there were significant private sector competitors who could ramp up supplies, or at least keep some minimum supply moving. The private sector players which exist have preferred to supply exclusively to the export market, or go through the state-owned retailers, because of the distortions in the domestic price and subsidy operation, which put private refiners at a disadvantage. If the government is keen to bring in more competition, as it should be, it must create a level playing field for private and state-owned players. This does not mean largesse for the private firms; all it means is that everyone gets the same treatment. And since it also helps build diversity of suppliers, it makes the system as a whole more secure from supply disruptions—especially since another strike cannot be ruled out, as the strikers’ grievances have not been addressed.
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