‘Politics beat economics’,yet Reddy firm on no oil hike

Even though he moved a Cabinet note recommending price hikes,petroleum minister S Jaipal Reddy on Friday ruled out any immediate decision,saying “it is a clear case of politics defeating economics.”

Written by ENS Economic Bureau | New Delhi | Published: September 8, 2012 1:42:46 am

The government on Friday presented a picture of indecision on raising fuel prices,even as the Indian Oil Corporation pressed for an immediate increase as under-recoveries — Rs 550 crore a day at present — on selling fuels below cost continue to swell.

Even though he moved a Cabinet note recommending price hikes,petroleum minister S Jaipal Reddy on Friday ruled out any immediate decision,saying “it is a clear case of politics defeating economics.”

A decision,he said,required “wide political consensus,” adding,“there is no immediate proposal with regard to the prices of various petroleum products including petrol.

IOC chairman RS Butola,however,said that the firm felt it necessary to effect an immediate hike in the price of decontrolled petrol — on which it is losing Rs 16 crore a day —adding he would take a call in consultation with the other two PSU oil retailers.

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