HE politics being played around the recent hike in petrol prices is probably one of the oldest games in this country.

Blaming the government for increasing the price of imported fuel is a little like cursing the wind. A breakdown of the price hike shows that three quarters of the increase is due to the PSO cost of supply, which has gone from Rs46.84 to Rs49.91 as per the notification. The remaining one-rupee increase is due to a 40-paisa hike in the Inland Freight Equalisation Margin, that little gimmick whereby the government ensures uniform prices at pumps across the country, and a 60-paisa hike in the sales tax. If the political parties that are protesting against the price increase have any ideas on how the cost of supply can be reduced, they should share them. The forthcoming session of parliament, where the issueis to be discussed, provides a good opportunity to do this.

International oil prices have been rising since last July. At the end of the year, the price increase from the lowest point in July was almost 50pc, according to Bloomberg data. The price build-up for petrol also went up. In July, the PSO cost of supply for petrol was given by Ogra as Rs40.65, which rose to Rs46.84 by November, and prices at the pump had gone up from Rs71 to Rs77 in the same period. Almost the entire hike owed itself to the increasing cost of supply. Building one`s politics around the idea that the government should ensure that prices of petrol and diesel are kept low at the pumps regardless of what is happening in the international market not only makes for old-fashioned populism, it also represents regressive thinking. The protesting political parties would make better use of their energy if they shared their ideas on how to reform our economy in a way that could reduce our growing dependence on imported fuels. But none of them have brought forward any vision along these lines. It is true that an increase in the price of petrol leads to inflation, but subsidising fuels is not the solution. It is high time the attention and energies of the large political parties were focused on an agenda for progressive economic reform, rather than simply rallying around prices.