The more you hear the minister of industry, commerce and consumer protection, Ashit Gungah, the more confused you become. 

Take his defence of the recent decision of the STC to hike petrol and diesel prices. Gungah declared that the government “could not accept an institution going bankrupt”. The minister refers, of course, to the Price Stabilisation Account (PSA) that is supposed to absorb oil price shocks. It swells when international prices plummet and shrinks when they go up. The problem with this explanation is that it doesn’t really explain much. Back in April, Gungah was busy defending the pricing system in the National Assembly and boasted that the government in February had introduced a new regulation whereby the PSA had to – no ifs, no buts -  maintain a minimum of Rs100 million in its account. If it went lower, that would trigger an automatic price hike. That raises an interesting question: if Gungah is right and the PSA was going bankrupt, should not some heads be rolling at the STC for violating a government directive of maintaining a minimum of Rs100 million in the PSA? No heads rolling yet. On the other hand, if the STC did as government regulations command and simply triggered the price hike before the PSA dipped to below Rs100 million, then why is the minister talking about bankruptcy? Why does the minister simply not tell it as it is supposed to be: the PSA is nearing its minimum balance of Rs100 million, therefore all of you need to pay more at the pump. Not quite the same ring to it. And what of the thing that supposedly caused this all? The 10% limit on price hikes that constrained the STC from raising prices further, as they argued should have happened, and caused this loss to begin with? Is the government closing that nifty little loophole? Nope. 

What follows is even more interesting. In the same breath, after the doom and gloom and the bankruptcy talk, the minister suddenly turned cheery and said that a continuing fall in international oil prices would lead to a growing PSA account! Then why on earth hike the price?! The STC is right in predicting that the PSA is going bankrupt but at the same time is also right in predicting that the PSA would grow! Wrap your heads around that.

Then, as if that were not enough, the minister pulled another rabbit out of his hat. Since the hike, bakers and bus owners have been clamouring for hikes of their own. Buses run on fuel and bread needs to be delivered. It makes sense: the greater the input cost, the higher the price of the product. The minister, however, has other ideas. Even though petrol and diesel are more expensive, the prices of bus tickets and bread will remain the same. Fascinating stuff. 

Instead of coming up with these confusing and contradictory statements (in a single press conference no less) the minister would be wise to simply make public the PSA so anybody can see, at any time, how much is left in it and whether or not a price hike is justified. But that would be too simple a solution.