Is bad governance, and not market forces, behind the petrol hike?

GN Bureau | May 24, 2012



In the steepest-ever fuel price hike, the government have raised petrol prices by Rs 7.54 a litre. The common man already groaning under a stagnant economy and sky-high inflation is hit hard by the hike. Indians are now buying petrol costlier than people in most other nations buy.

This is being justified in the name of falling value of rupee against dollar. However, if you come to think of it, hiked petrol prices would further add inflationary pressure on the economy. In such a scenario, a rethink on the pricing mechanism would have been a better option.

So, is bad governance, and not market forces, behind the petrol hike?

 

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