Cong for petrol pricing retreat

The divide between the government and the Congress party was out in the open today on the petrol price rise. Facing criticism from all sides — allies as well as opposition, the Congress asked the government to consider rolling back the increase at least partially.

Prime Minister Manmohan Singh said at Cannes: “We must move in the direction of decontrolling more prices. I have no hesitation in saying markets must find their own levels.” About subsidies generally, the PM said, "We cannot live beyond our means. We have to recognise money does not grow on trees."

Finance Minister Pranab Mukherjee said it was not the government which raised petroleum prices. “Please remember, this is a decontrolled item, and the companies maintain petrol prices. The government had deregulated or freed petrol from all price controls last year,” he said.

But the Congress had other political concerns. Weighed down by the dual pressure of incensed allies and Assembly elections in five states next year, the party today nudged the government towards a partial roll back.

In the capital Delhi itself, prices have increased from 58.37 to petrol per litre in March to Rs 68.64 a litre at present.

Spokesperson Abhishek Manu Singhvi said, “The Congress party is very concerned about the price rise and calls upon the government to take measures, and hopes the government will look into the matter very seriously.” Making it clear that the party was “not interested in the methods to be adopted to do this”, Singhvi made clear that “we are only interested in the results” – ie to give a “healing touch” to the common man. Singhvi however stated that diesel, kerosene and gas – items most used by the common man are controlled items.

The demand to roll back prices rose from a clamour into a roar with UPA allies joining the chorus of criticism.

“Our withdrawal of support may result in fall of the government. But since the Prime Minister is away, we want to discuss with him and have sought an appointment with him,” Mamata Banerjee told reporters in Kolkata. The Nationalist Congress Party (NCP) also said it would ask the government to review the price rise. Farooq Abdullah’s national Conference, which is in goernment in jammu and Kashmir in alliance with the Congress also criticised the hike.

According to Congress insiders the party will have to bear the consequences of the government’s decision on price hike. “Whether we should go back to controlling petrol prices or reduce VAT or take whatever steps – that’s for the government to decide, what we want is a partial roll back so that we do not end up alienating the aam aadmi,” said a Congress leader.

UP chief minister Mayawati, a crucial poll bound state has predictably started issuing statements about the “anti-people policies of the UPA”.

Significantly, decontrolling petrol prices ie the Administered Pricing Mechanism was a decision taken by the BJP led NDA government too in April 2002 but was strategically stopped just before the elections.

“Whatever steps are required should be taken” to handle the issue was the response of a senior party functionary when asked whether Congress would like the government to have a re-think on the issue of APM.  The leader also said that if the UPA is being questioned on the issue of de-control of petrol prices, then the NDA should not be spared as it had began the initiative.

Added to this, is the open threat from allies like the Trinamool Congress have increased the Congress’ discomfiture. “What has led to this difficult situation is the government decision on lifting control from petrol pricing, a decision which was taken and agreed upon in the Cabinet. All alliance partners were present there- they no the repercussions of it, so why the opposition now,” says a senior Congress leader.

With the UPA agreeing to take this bold step, it had also opened the flood gates of public anger and political alienation from allies.