Volume 6, No. 1, January 2005


Masses Bare Burden of Oil Price Hike to give Windfall Profits to Oil Cos. & Govt.


Bowing to the dictates of the imperialists the earlier government removed the Administered Price Mechanism throwing oil prices to the vagaries of the market. This has affected the prices of petrol, diesel, LPG and kerosene. Besides, each successive government has sought to reduce the subsidies pushing this basic fuel out of the reach of the poor. The worst affected will be the workers, peasants and the middle-classes. Particularly the rise in the price of diesel will affect all, as transport charges of essential commodities will sky-rocket. The rise in prices of petrol and LPG will badly hit the middle classes, and organized working-class.

This price hike is nothing but the result of the policies of opening out the country to the imperialists and bowing to their dictates. Firstly, while India has huge untapped resources of oil and natural gas, it is now dependent for 70% of its needs on imports. Secondly, the earlier BJP-led government totally bowed to imperialist dictates by removing controls on the pricing of oil and its products thus making it dependent on the vagaries of the international market. The Congress-led government, backed by the CPM has continued with these same policies. Worse still, it has increased the burden enormously, where oil prices in India are nearly double that of the international prices. Thirdly, the hike in LPG is not linked to the rise in international prices but is due to the government aim to remove the subsidy. Finally, in the entire pricing mechanism, the excise duty on oil if cut or removed will entirely meet the additional costs in the international prices. This the government does not do, as the imperialist dictated polices of ‘economic reforms’ is intended to push the burden further onto the backs of the masses and not cut government revenue.

Most important of all with the rise in prices of oil it is only the masses who have suffered; the oil companies have seen a massive growth in their profits and the Central government has seen a windfall increase in customs duties from imported oil. The major beneficiaries have been the public sector oil companies and Reliance that control the bulk of the refining. To take just one example — IOC’s profits grew by a gigantic Rs.4000 crores (i.e. nearly $ 1 billion) in the last two year period, from Rs.2884 crores in 2001/02 to Rs.7004 crores in 2003/04. In the same period the price of petrol (Delhi) rose from Rs.26.5 per litre to Rs.39 now. Reliance witnessed an even bigger jumps in profits. In addition, though the government marginally reduced excise duties on imported oil, the net duty on oil products is still around 30%, giving it a massive net revenue of $10 billion (Rs.45,000 crores) this year, or $1.1 billion more that expected. In other words the hike in prices has only gone to fill the coffers of Reliance and the government, at the cost of the living conditions of the people. It is an out-right loot of the people by the government and big business. The government and big companies are hand-in-glove to rob the masses.

The increase in the present prices is the product of the imperialist dictated economic policies of the present and past governments and NOT merely due to the hike in the international prices — that too, through close collaboration with the revisionist CPI/CPM that is backing the government in power. All the noise made by many an opposition party against it is also a hoax, geared to make political capital out of the issue, as it is only their earlier policies that are being continued by the present government. Also, much of the opposition by various political ‘left’ formations is merely a part of their vote-bank politics, as each is demonstrating separately and not building a united movement against the price hike. Their prime aim is the narrow interest of focusing their party banner and not unitedly fighting back the hike. The need of the hour is for all progressive forces in the country to unite to firmly oppose and militantly fight back this price hike.

THE COMMUNIST PARTY OF INDIA (MAOIST) condemned the increase in petrol prices and called for a massive united movement to vehemently oppose this hike. Silence will only lead to a further burden on the masses, as all parties servilely bow to imperialist dictates, whose sole aim is to rob the country’s wealth, by increasing the burden on the masses. There is need to expose the hoax of so-called opposition by the CPI/CPM. To cover up their collaboration with the UPA’s pro-imperialist policies they resort to the fraud of role-back. In this the government first raises the prices by 20 to 30% more than what is planned and then under so-called ‘left’ pressure reduces the hike by the 20-30%. So in this case the govt put forward the ridiculous proposal to increase LPG rates by Rs.5 per month. This was then removed and the CPI/CPM was made to look as though it had ‘pressurised’ the government. Such methods are nothing but tricks to hide the ‘left’s’ total collaboration in pushing through the imperialist-dictated policies of the new government. They do not expose the ugly face of the government who has shifted the entire burden onto the backs of the people, thereby serving the interests of these companies. It is the people that have to put pressure on the rulers by fighting back these anti-people policies in a consistent and thorough-going manner. Token resistance only acts to diffuse the discontent.





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