Opposition protest oil price hike in India

Featured - May 25th, 2012
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Opposition parties in India have called for a national one-day strike in protest against petrol price hike. Sharad Yada, convener of the National Democratic Alliance (NDA), asked shops and offices to close and vehicles to stay off the roads to demonstrate their anger at the rises. Rising costs pose a challenge to the Congress-led government in the middle of a “political degradation” blamed for the slowing economy.

The government deregulated petrol prices in 2010 to reduce the massive subsidies it pays to oil firms and relies on imported energy. Recently, it experienced the “sharpest jump” in petrol prices, blaming subsidized rates, rises in the international price and a plunging rupee. Yadav told reporters in New Delhi, “prices of commodities are rising uncontrollably, making it difficult for an average Indian to make ends meet”. Annual inflation rates rose to 7.23% in April, while food prices soared by over 10%.

Inflation is a key threat to the government, as Prime Minister Mammohan Singh’s followers are constituted mostly by the poor. India depends heavily on energy imports with over three quarters. Secretary of State Hillary Clinton on her recent visit to the country urged New Delhi to cut oil imports from Iran.