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If the objective of the strike by oil sector officers was to demonstrate their indispensability to the system, they have succeeded. Chaos ruled in the major metros over the past couple of days as fuel pumps ran dry and gas-based fertiliser plants shut down. In the depressing scenario of a slowing economy, plant closures for want of orders, job losses and the Satyam scandal, the last thing the economy needed was an artificial shortage of fuel caused by the strike, made w orse by a parallel strike by transporters. One is unable to grasp why the Government could not avert the oil sector officers’ strike despite knowing about it well in advance and with its potential for chaos.

Even though the strike has been called off, there are a few lessons that the Government needs to learn from the episode. The most important is the need for reform and facilitating private sector competition in fuel retailing through appropriate policies. Indeed, had the Government not driven out private players from the retail business through its price control policies, neither it nor the consumers would have been in the lurch today. If the oil sector officers succeeded in their objective of holding the Government and consumers to ransom, it is plainly due to the stranglehold the public sector oil companies have on the petroleum trade. Alternatively, had the Reliances, Essars and Shells of the world been allowed to grow their retail businesses on a level playing field with the public sector players, the strike now would have proved ineffective. Indeed, it may not have happened at all.

The Government only has to draw on its experience in the telecom and aviation industries. Not too long ago, the public sector telecom unions could hold a gun to the Government’s head and have their way by threatening a disruption in communication services. The presence of private telecom players has rendered that gun a mere toy. Similarly, pilots of Indian Airlines/Air India would refuse to take to the air at the drop of their smart hats. With formidable private players threatening to take away business and render them jobless, the strike threat is not a weapon anymore. The oil sector already has strong private players — in fact, stronger than in telecom or aviation. But they are shackled by unhelpful government policies. All that the Government needs to do now to ensure that the country is not brought to its knees again for want of fuel is to free competition in the oil sector. That would be the best response to those who called for the strike.

More Stories on : Editorial | Trade & Labour Unions | Petroleum

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