Fuel protest strikes hit Indian transport

Trains and planes were halted across India today by strikes in protest at fuel price rises.

In Mumbai, India’s financial and entertainment capital, taxis went off the roads as protesters belonging to the Hindu nationalist Bharatiya Janata Party and Shiv Sena came out on the streets.

The opposition called the day-long protest after the federal government refused to drop the 6.7% increase announced 10 days ago.

The unpopular move came as the government struggled to stem losses at state-run oil companies and tame the fiscal deficit while facing double digit inflation.

There was no major violence reported in the country during the strike, although there were some minor scuffles between demonstrators and police.

Demonstrators and police also clashed in Lucknow in northern Uttar Pradesh, where two Hindu nationalist leaders, Arun Jaitley and Mukhtar Abbas Naqvi, were detained by police.

Thousands of people were stranded for hours as protesters stopped trains in West Bengal, Bihar and Andhra Pradesh states by blocking the rail tracks.

Worst-hit were the states governed by communist groups and the opposition Hindu nationalist Bharatiya Janata Party, which is seen as generally pro-market. Those states included Madhya Pradesh, Gujarat, Karnataka, West Bengal and Kerala states.

There were also some minor disturbances in New Delhi, although businesses and schools remained open.

Top BJP and communist leaders led hundreds of their supporters in street protests in the Indian capital.

“We will continue our protest until the government takes back its decision,” said D. Raja, a Communist Party of India leader.

The government dismissed the strike as opposition posturing.

“Is this strike a constructive solution to the problem? Does it help poor people in any way?” Abhishek Manu Singhvi, a spokesman for the ruling Congress party said.

“If the idea was to get some attention there are other ways to get that. The goal of this strike is just sensationalism.”

The government last month decided to deregulate petrol prices, resulting the increase.

The price of diesel – important for farmers’ irrigation pumps and tractors, as well as trains and buses – rose by 5%, or 2 rupees per litre, but will not be deregulated immediately.

The government also raised kerosene prices by 33%, or 3 rupees per litre, the first increase since 2002. But the government continued to subsidise kerosene, which is used for cooking by tens of millions of poor Indians.

Liquefied petroleum gas, also used for cooking, now costs 35 rupees, or 11.2%, more per cylinder.

Even after the increases, state-run oil and gas companies will face a shortfall of 530 billion rupees (€9bn) from below-cost sales, India’s petroleum ministry said.

Price controls have bled profits from state oil companies like Oil and Natural Gas Corporation and Oil India. The government has been forced to spend billions through direct subsidies and off-balance sheet oil bonds to help compensate for the losses.

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