The seven-party alliance (SPA) government has sharply jacked up the prices of petroleum products though its constituents had been up in arms against the hikes last time. Unsurprisingly, public protests have erupted across towns. The government cannot afford to subsidise them as annual oil

import bills run to many billions of rupees. It cannot influence the international prices, either. But what is a matter of public concern is whether the government has done enough in its power to ease the burden on the common man. The hikes this time range from 11 per cent to 39 per cent. Now, perhaps for the first time in Nepal, the retail price of kerosene, the cooking and lighting fuel for many poor Nepalis, has been brought up to the raised diesel price at over Rs.59. This betrays an utter lack of the government’s sensitivity to public interests.

The hapless consumers stand to suffer in two ways — from the hefty hike in the wholesale price and from the higher profit per litre for the petrol pumps. Of late, the government has allowed the petroleum dealers to set the retail prices. But, it effectively controls the prices through the Nepal Oil Corporation (NOC), a state-owned undertaking. It is unfortunate that Hridayesh Tripathi, minister for Industry, Commerce and Supplies, is obviously running with the hares and hunting with the hounds. He has blamed the finance ministry for its refusal to cut the customs duty, ‘despite an earlier agreement’ which would have left kerosene and diesel untouched. Indeed, the various government taxes on the petro-products hover at around 30 per cent of their selling prices — undoubtedly too high a rate. But as a minister, Tripathi is supposed to own responsibility for his own decision, otherwise he loses the moral authority to continue in office for a single day. Similarly, the political parties now in power have issued statements in protest against the hikes — another blatant instance of taking the people for a ride.

Tripathi has hinted at price reductions by saying that the high profit margin of the petroleum dealers is ‘unacceptable’. But such a sop would come to just one or two rupees beside the sharp increases in the wholesale prices per litre — petrol (Rs.15.77), diesel (Rs.4.98), kerosene (Rs.10.16), cooking gas (Rs.100 per cylinder), and aviation fuel (Rs.21.38). According to NOC, it will still continue to lose Rs.216.6 million a month, down from the Rs.830 million a month, thus hinting at the need for yet another bout of price hikes once the public has absorbed the present shock. NOC owes nearly Rs.12 billion to creditors — Rs.9 billion to its sole oil supplier, the Indian Oil Corporation, and the rest to various financial institutions. The hikes will have widespread effects on the ill-performing economy. First of all, it would push up the inflation rate, already on a double-digit threshold. The public cannot be reconciled to the fact that the government has done virtually nothing to crack down on corruption within NOC and government offices, streamline bloated NOC bureaucracy, cut wasteful expenditure, and keep overheads within limits. Besides, the public has the right to know the actual cost of the petro-products at different stages from the source to the selling price.