PM Rules out Rollback in Fuel Prices

Prime Minister Manmohan Singh Monday ruled out a rollback in prices of petrol and diesel, saying the economy has the capacity to absorb the increase without triggering inflationary pressure, said reports.

“Any increase in prices does hurt some people, but we have to take a long-term view,” he is reported to have told correspondents accompanying him on his way home from Saudi Arabia.

“We cannot save people from inflation if we follow all populist fiscal policies. Sooner or later these populist policies if persisted for a long time to come will lead to the erosion of the investment climate,” he said.

“So we have to balance these factors.” The direct effect of the increase in the fuel prices effect on the Wholesale Price Index will be no more than 0.40 per cent, the Prime Minister was quoted as saying.

Without negating prospects of some escalation, Singh said he hoped that with the Rabi crop coming into the market, prices like wheat, sugar, oilseeds and pulses, will see some moderation.

He expressed confidence that the economy has the capacity to absorb the hike in oil prices without setting off an inflationary spiral.

(Based on media reports)