India to raise fuel prices amid protest

The Indian government has indicated it will push ahead with its decision to raise fuel prices despite strong political opposition. Lawmakers from opposition parties led demonstrations and disrupted parliament demanding that the government roll back its decision to raise fuel prices. Opponents of the hike say it will fuel inflation, which is nearly 9%, its highest level in more than a year. But Finance Minister Pranab Mukherjee says the oil price hike is necessary to bring down the fiscal deficit, which is at a 16-year-high. India subsidizes the prices of oil products such as gasoline, diesel, cooking gas and kerosene fuel to protect poor people from sharp fluctuations in energy prices. The dispute over fuel prices will test the government’s determination to push ahead with further reform of state-run sectors such as petroleum. (March 9, 2010)