The big oil price hikes have started having multiplier effects on the prices of goods and services. First of all, transport fares have shot up. The government has decided to raise the passenger fares of commercial vehicles by 25 to 28 per cent with effect from yesterday. For example, commuters in the Kathmandu Valley will now have to pay a minimum of Rs.9 per person as against the not-long-ago-hiked fare of Rs.6 (up to a five-km bus journey) and the fare round Ring Road has been fixed at Rs.15. Similarly, taxi and microbus fares have been jacked up, too. Air fares have already been considerably hiked. Goods carriers like trucks have already started charging much higher rates than earlier. All this is bound to push up the general price level significantly. The prices of a number of goods have already gone up, including construction materials and food items.

At a time when the economy is going downhill, with growth rates hovering round zero, taking into account the population growth rate, and unemployment rate being estimated as increasing, the hardest impact of the price hikes will fall on people in low-income brackets as well as the unemployed. Besides, hundreds of thousands of Nepalis have been displaced because of the conflict, apart from tens of thousands who lost their near and dear ones or whose family members were maimed, and the great majority of them have been reeling under economic and other hardships. What the present bout of price hikes means for them is not difficult to visualise.

This is happening under a government which had come to power a little more than a year ago promising, among other things, that it would provide good governance and deliver better services. It had also pledged to the economically hard-hit people that they would be able to feel a difference within two weeks. Fifty-five weeks have already elapsed, but they have instead been facing one after another addition of affliction. No doubt, it is generally agreed that the government cannot go on subsidising petroleum products. But its lack of transparency on the exact import cost of the products, its failure to cut waste and its lack of honesty in trying to pass the buck to the private sector for its own decision to hike the prices are something else. No less important is the government’s lack of interest in cushioning the impact of the hikes. For example, it could do away with the existing taxes on the oil products. These factors and the Nepal Rastra Bank’s admission that it would not be able to control the inflation through monetary measures alone mean that the common man will continue to be left high and dry.