By another name
Last Friday’s hikes in the prices of kerosene, diesel and petrol are the second upward revision of the prices under the present governement. Everybody knows that the Nepal Oil Corporation has been finding it difficult to meet its oil import bills. In recent years, petroleum products have gone up in price considerably in the international market, and NOC has increased the prices several times, too. It is also a fact that the government cannot go on subsidising the oil products. The last price hikes had triggered strong public protests. What the government has sought to do now is to insulate itself from the political fallout of unpopular decisions by making believe that it is the private dealers who fix prices. The principal difference, however, is that NOC now charges dealers more in wholesale price, and they, in turn, jack up the retail prices.
The Nepal Petroleum Dealers Association has fixed the retail prices for the Kathmandu Valley — diesel at Rs. 54 per litre, (from the earlier Rs. 46, registering an increase of over 20 pc), kerosene at Rs. 48 (from Rs.39, a hike of over 17 pc), and petrol at Rs. 68 as against the earlier Rs. 67. Under the new pricing regime, both wholesale and retail prices will be fixed taking into account transport costs, so the prices will vary from place to pace. Within a band, the dealers have room for manoeuvre, and as their cartel fixes the prices they are more likely to charge the maximum.
Therefore, no room is left for any consideration for the common man. The hike in the price of kerosone will make their life even more difficult, aggravated by the hike in the diesel price, as it will lead to greater transport costs and push up the general price
level. According to a preliminary survey by the Nepal Rastra Bank, the petroleum hikes will add to the price level by 1.82 per cent. When the central bank has already admitted its inability to rein in inflation, a major task for which it was created, inflation is bound to go unchecked. Things continue to go in the opposite direction from the promise made by the royal government to make the people feel a sense of relief within fifteen days. The government’s declining spending in the social and productive sectors and ballooning expenses in the security forces and huge waste have only given the public an impression of government irresponsibility. NOC’s lack of transparency on how much is the per unit import cost of each petroleum product adds to this feeling. The public has a right to know whether they are paying for official corruption and inefficiency or for genuine reasons.