The price rise during UPA delivered the nation to BJP in 2014 General elections. With high fuel prices and resulting run away inflation knocking on its doors, NDA too seem to be facing the the same situation as it prepares to go for a mandate.
The Fuel prices have already touched their highest ever value, with petrol selling at Rs 76 in Delhi and at Rs 84 in Mumbai. The bigger problem is of Diesel. At almost 72 Rs a litre in Mumbai even the common fuel for truckers is going to hit the transportation segment hard. Its only a matter of time when this cost is passed on to the cost of almost all goods – from vegetable to durables. With Fiscal deficit still out of control, government has no war chest to prepare against the inevitable inflation onslaught.
While the Saudi’s have expressed their willingness to address Indian concerns, the matter of fact is that all producers are rejoicing the situation. Russians with weaker Rouble and higher USD earning are witnessing a windfall. Even the Iranians, who were threatened by US sanctions causing this price rise, are benefiting from the same by about 20%. In US the higher prices are already helping reviving the shell oil industry and Venezuela is looking to make a come back (after it fixes its output problems).
On its part India did nothing to fix its dependence in the last four years of low oil prices. Neither did Indian companies find new fields to secure Indian energy requirements nor did the government tried to sign treaties to secure long term agreements with any of the producers.
Indian dealings with Saud’s has not gone un-noticed by Iran. As India refineries ordered more from the Sunni Kingdom, Tehran reduced credit period of Indian companies from 90 days to 60 days.
Railways too has not been updated to reduce the dependence on truckers, for all talks of providing freigh corridors driven by Trains, none has seen the light of the day.
Gods have had been too kind to Modi, for too long. As the four assemble elections followed by general election close in, Modi has real governance challenges.