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Kathmandu Wednesday November 01, 2000 Kartik 16, 2057.
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Don't make it worse
Opposition parties decided to launch a
series of joint protest programmes to denounce the recent price hike in petroleum products
the other day. The government should take this matter seriously because the hike has
affected the life of people quite seriously. Apart from this, it has become obvious that
the hike in petro-prices has already begun to eat into the country's foreign exchange
reserves. Now as things stand, any attempt to roll back the prices of petroleum
products is bound to boomerang on the economy. On the other hand, it is quite clear that
the proposed joint protest programmes will affect long term economic growth rather than
serve the interest of the people.
It is sad but true that the country meets
the entire domestic demand for petroleum products through imports. The problem is, the
country has had to face 280 percent increase in the price of petroleum products since
February 1999 when the price of crude oil was as low as 10 dollars a barrel in the
international market. This means what we shall now have at hand is a ballooning import
bill for oil just to meet the domestic demand. This has happened due to lack of proper
administered price mechanism and absence of scope for manoeuvring prices in the domestic
market. If Nepal had not pegged its currency to the Indian rupee and if it had not been
dependent on oil, things would have been different from what it is today. The recent hike
could then at least have been regulated effectively. Unfortunately, this cannot be done in
Nepal due to the open border system and other economic ties with India. As a result, the
government has further pushed the country into economic chaos.
On October 13, Nepal Oil Corporation (NOC)
had to raise the prices of petroleum products after they touched a 10-year high in the
international market. With this, a litre of kerosene in the open market costs over 26
rupees and LP Gas costs 550 rupees per cylinder. This has hit the life of both low
and middle income groups hard. Besides, the allegation, that the government's decision to
introduce "kerosene card" for household purposes at subsidized prices could
breed more corruption than provide relief to those who have been badly affected by the
price hike, cannot be so easily dismissed.
The joint protest programmes against NOC's
decision to hike the prices of petroleum products will turn things from bad to worse. If
the government had foreseen such an eventuality and left enough room for manipulating
prices, neither would the country's economic growth be in jeopardy at the moment nor would
opposition parties come up with such a strong denouncement of the hike. The proposed
two-day bandh will no doubt paralyse the movement of goods and result in loss of millions
of rupees. The government must understand that the country has suffered more than it has
gained due to the open border system and other economic tie-ups with India. It, therefore,
has to introduce measures that prevent a situation by which cheaper petro- prices in Nepal
results in massive smuggling to India. Effective regulation of the Nepal-India border is
therefore a must.
The hike in petro-prices is unfortunate
indeed, and it is bad enough that the government is not in a position to do much about it.
Now, the opposition parties would do well not to make things worse with their protest
programmes.
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