INDIA PLAGUED BY 3 P's - POLITICS, PRICES AND PARTYING
By Ruma Dubey
Politics is all about timing. The right time to protest, the right time to threaten, the right time to woo people with sops, the right time to hike prices and the right time to roll back. And DMK has got its politics bang on!
UPA had to time its petrol price hike to try and stem the depreciating rupee; but alas a price hike never ever has good timing! But within a day after the price hike was announced, BPCL announced a windfall Q4 net profit and also went on to declare a 1:1 bonus. That was like adding salt on injury – on one hand, the price was hiked on the grounds that OMCs were not even able to survive but immediately we see this 1:1 bonus and very handsome bottomlines. Fighting for survival? They were more than kicking alive!
HPCL too did very well. For Q4FY12, it reported an over four times rise in net profit. Indian Oil reported an over three times rise in Q4 net profit. Yes, this windfall gains which we see is mainly on account of the subsidy portion coming in. ONGC made the largest ever contribution of Rs 44,466 crore and despite that, it’s net profit for Q4 more than doubled and that for FY12 rose 33%. A few days ago, till even last week, reports were put out that OMCs were staring hard at a combined revenue loss of Rs.1.38 lakh crore in FY12 and were to post losses for the fiscal too. But as we can see, nothing like that happened.
The OMCs are today making statements that they are ready to cut prices of petrol by about Rs.2/litre or by Rs.1.67/litre to be more precise. Infact the OMCs are in a generous mood, given their windfall gains and drop in international crude prices and they are ready to bring in this price cut into effect, from as early as 1st June.
Naturally, in this background, when at this juncture, OMCs themselves have signaled a price cut, the timing of DMK could not have been more perfect. Most on the street would not even know about this math of OMCs; for them it will be the memory of DMK forcing the Govt to pull back prices which will remain. Thus DMK has made perfect use of a piquant economic situation for its political gain.
DMK has not pulled out; Karunanidhi is only threatening to pull out – which is more of political posturing and pressuring. It is DMK’s time, after the image bashing it had got, thanks to A.Raja and Kanimozhi, to now make a point.
For UPA unfortunately, its entire time itself is bad. Nothing that it does seems to go right. It could have been proactive and announced a rate cut yesterday but then, UPA rarely works fast. Well, DMK worked this out fast and today it stands to gain. And the fiery Mamata didi was busy hosting KKR and Shah Rukh Khan; that as per her was her political timing for celebration.
The price cut can indeed be worked out if all work in tandem. 46% of the fuel cost is loaded by various taxes by the state and center. So if both could work together, bring down this burden, then along with the support of the cash flush PSU OMCs, price can be brought down by at least Rs.5/litre.
Now the politics here is whether the price comes down by Rs.5/litre or as asserted by the OMCs, by Rs.1.67/litre....