Yet, our government isn't cutting prices! Apart from the economic stupidity - inflation gets cut in half in a few weeks with a price cut - there is a huge political problem too. More than five states are going into elections in a month, and the general elections are a few months away. Rate cuts don't stimulate economies - price cuts can at least provide some relief.
The time is ripe for an oil price cut - has been for a while now. No speculation of course, and all action needs to be taken AFTER an oil price cut, not before. There is just no point now - demand for petrol and diesel is dying by the day, with our own recession coming along. Without a price cut, every oil marketing company will suffer: you've already covered their losses through oil bonds, which we the taxpayers are saddled with. Now get off the high horse and either let pricing be market based or reduce.
It's now bordering on silly. Oil price reductions don't immediately pass on to prices - every person will try to book some profits on the increased spreads and hold out as much as possible. It will take three months, in everything. What can they be thinking? Is there a reason to NOT reduce prices now?
(Forget what Murli Deora says, he has his head up the wrong side - he has lied so many times it's not even funny.)
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>UPA is more concerned about the loksabha elections and wants to retain price cut in public memory for election times.
If they cut the price now, public memory being very weak, there will be no political milage out of it.. Hence the delay..
11.11.08 at 6:58 AM
>http://www.business-standard.com/india/storypage.php?tp=on&autono=48161
Apparently, it could be due to upcoming state elections and need to follow election code.
11.11.08 at 4:37 PM
>i agree with anon
they want the biggest bang for the buck, they will cut just before the moral code of conduct for lok sabha kicks in
11.11.08 at 4:48 PM