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When increasing price of crude in the international market is exerting a pressure over the Indian government to raise the fuel price, Prime Minister Manmohan Singh on Monday said that government is not in a position to fully insulate the consumer from the impact of rising oil prices.

On one side when the political parties including the Left are opposing hike in fuel prices, Prime Minister warned that the government could insulate poor people “up to a point” and economic pricing of oil was essential to sustain growth.

“We cannot allow the subsidy bill to raise any further.” said Singh addressing the Assocham’s annual meeting in New Delhi.

Prime Minister, however, ensured that the Indian economy will grow at 8 per cent and above despite of global slowdown. India has maintained the economic growth of 9 per cent and above for the last three years.

Fuel crisis is a cause of concern in the country as well as the world now-a-days. Despite the crude oil prices crossing the range of 127 dollars a barrel in the market and causing huge losses to the state-owned oil marketing firms, Indian government has not been able to pass on the burden due to lack of political consensus.

There are differences within the government also as to how to resolve the crisis. Finance Ministry is opposed to duty cuts sought by the Petroleum Ministry as also the Left parties.

Due to these differences the fuel hike decision is delayed day after day. According to the current reports the government has said that the decision is expected to come in this week.

Tags: Essential Commodities, Fuel Price, LPG, MM Singh, PM, Price, Price hike

Once again inflation rate has reached a new height of 8.1% to give stress marks on the forehead of government and the public. Inflation struck at 8.1% for the week ending May 17 against 7.82% for the week ending May 10 in the face of surging international crude oil prices.

Finance Minister P Chidambaram, is however, still confident to suppress the rate and control the surging prices in India. The Finance Minister added that authorities may take more steps to control inflation if needed.

“It is worrisome, but we are confident of gaining mastery over inflation,” he said.

The inflation was 7.82 percent for the week ended May 10 as compared to 7.83 percent for the previous week, said the official figures released today.

During the corresponding week a year ago, the inflation stood at 5.62 percent.

Amid speculation of rise in prices of petroleum products, inflation is likely to remain high for the next 3-4 months. Analysts said that increase in the fuel price will further raise the inflation.

The Reserve Bank and government must have to take additional monetary and fiscal measures to control the rate.

Tags: Commodities, Essential Commodities, inflation rate, Prices, Rising Prices