Oil price hike unavoidable: Prime Minister

Signalling hike in petrol prices was inevitable, at a time when the government now can not ignore the upward increase in the prices of fuel products in the international market and also can not allow the subsidy bill to rise any further, the Prime Minister Manmohan Singh sought to get consensus of all political parties including Left during his inaugural address to the annual general meeting of the ASSOCHAM here Monday.

Despite Left's protest against any hike in prices of crude oil and pressure upon the government to may carry out nation wide agitation, Manmohan Singh's indication is evident that upward revision of crude oil prices is unavoidable.

“To maintain economic growth and to ensure its stability and sustainability, the government have to follow more prudent fiscal policies,” said the Prime Minister.

The UPA government has not raised the price of kerosene oil in the past four years and the LPG and the diesel too, have been raised marginally. He said that though some slight hike in petrol price has been marked, but still do not reflect world trends; the government now do not have the margin to fully insulate the consumer from the impact of world commodity price and world oil price inflation. Any further subsidies will hamper the economic progress of the country.

It would be improper to think only about present scenario rather than paying due attention to sustaining the long term growth of our economy; blindly following short term policies would return us to the era of blind controls of the past. At the same time we are committed to protect the grassroot people from the adverse impact of inflation through fiscal means, Dr. Singh said.

Unfortunately we have been completely reckless to other natural resources, especially water; the consequences of which could be disastrous for us, we can not remain altogether indifferent to such global crisis. “We need therefore wider political consensus to adopt more rational economic policies,” he said.

The unrelenting rise in crude oil prices threatens to disrupt the development process in a large number of oil importing developing countries. It can have adverse consequences for the global war against poverty. We therefore need a new global compact between oil producers and the developing world.

The Prime Minister also called on the Indian private sectors and big business communities to play vital role in driving the growth process and taming the price rise, for, the government on its part will put every effort and endeavour to facilitate this process and provide them a supportive policy environment.

In spite of global slump following escalating price of petroleum products, Dr. Manmohan Singh exuded full confidence in the Indian economy continuing to grow at a rate of 8 percent, especially when for the last three years the economic growth was pacing with 9 percent or above.