Oil price hike: Need for a pragmatic attitude and options

Shailendra Kumar Upadhyay:

Suddenly, the government announced a big increase in the price of the petroleum products, which hit all the Nepalis, particularly the lower income groups and the students. Naturally, the shock delivered by the price hike has been quite big. The parties have seized this opportunity as a means to use the popular unrest to malign the government led by Deuba.

This is not the first time that the prices have increased, nor is this the first time that parties out of government have used the opportunity to malign the party in power. The party/parties in the government have always appealed for restraint and have given reasons for the hike and the parties against the government have agitated in the name of people’s interest. This type of political opportunism raises grave doubts on the ethical side of democratic politics.

Although the reasons forwarded by the government are not fully convincing and many such opinions have been expressed by eminent persons, criticism of the government must be to the extent the explanations do not hold true but at the same time consideration should be given to valid reasons. Only then is the opposition responsible and democratic. Otherwise, the creation of a negative attitude just for the sake of opposition shall create a climate of mistrust against any government.

In a democracy opposition is an essential principle. In a democratic society opposition is not based upon threat and violence. Breaking of fences and burning of vehicles are activities of violence. Violence cannot be condoned on the basis of its scale, but has to be condemned as a matter of principle. Those who do not possess arms use their fists on the targeted person. Even use of fists does shed blood, break legs and arms and sometimes is fatal. So violence should not be connected with arms alone, it is a matter of attitude where force prevails over reason.

A number of experts have expressed the opinion that the price adjustment could have been more reasonable and the rise could have been scaled down if there was a will to stop corruption in the Nepal Oil Corporation (NOC). The charges against the NOC have been repeatedly made. The government has to take this up seriously. The other opinion has been to break the monopoly of the NOC to supply POL products. The private sector should be given the opportunity to compete with the NOC and among its operators. It is a well-known fact that competition brings advantages to the consumers. While the above-mentioned measures are necessary to be adopted, the fact of rise in the price of oil in world market cannot be ignored. Artificial pricing based upon subsidy cannot be a sound economic policy. In the long run it creates more deficit. A pragmatic attitude is needed to sustain smooth economic activities.

In our country we have abundant natural resources. Dependence on our own resources does not make us a victim of global problem. We have to acknowledge that the fossil oil is for a limited time but the flow of Himalayan rivers will remain forever. So, lack of a national water resources policy will perpetuate the problem. There has to be a sound policy to use our water resource and curtail our dependence on fossil fuel. We claim to have second largest water resource in the world and dream of harnessing it to enrich our nation. Yet, our dependence on POL products is increasing and because of the policymakers’ love for mega-projects our dependence on foreign loan and technicians is increasing. Every village in the hills and many in the Tarai can be quickly electrified with the help of indigenous capital and technicians if we opt for micro-projects. But the charm of mega-projects is prevalent because of foreign and local lobbyists who can influence the policymakers and the politicians by showing the glare of huge commission generated by mega-projects. The micro-projects are unable to produce such charm.

It does not mean that there is no need for mega-projects. The micro-projects will have immediate and positive effect on the life of rural people. The electrification of the rural areas shall increase the productive capacity of the people and enhance the scale of informal education and literacy. It shall reduce the use of kerosene. However, to run vehicles, heavy machines and to sell electricity we do need mega-projects. A national policy has to be charted to install mega-projects in cooperation with our neighbours who would be the primary buyer.

During the eighties, the government had made a plan to extend the number of vehicles run by electricity. A plan to introduce trolley bus services around Ring Road in the valley, a service between Tripureswor and Thankot, Bhaktapur and Dhulikhel, Ravi and Dharan, Sunauli and Butwal had been finalised. In place of completing such plans and adding more, the governments after 1990 did not give any thought to such schemes. Their abhorrence towards the Panchayat system overwhelmed them so much that not only did they abolish the ancient name of the village administrative units but also shelved aside the plans made in those days. The attitude of the political leaders only reveals their lack of seriousness towards national issues.

In the last 14 years the nation has experienced many traumas and the present turmoil must have made the politicians wiser. They should display wisdom to build a national consensus, casting aside all past prejudices to build a map for the 21st century Nepal.

Upadhyay is a former foreign minister