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Oil on hold till US poll
- Govt pins hope on market softening

New Delhi, Oct. 31: If oil prices did not go up today, it was thanks to the election ' the one in the US, or so it was claimed.

'Prices are not being raised today,' petroleum minister Mani Shankar Aiyar said.

The Vajpayee government did not raise oil prices for six months because of the Lok Sabha elections in April-May. Now, Bush versus Kerry has saved the consumer, even if temporarily, and possibly only to deal a heavier blow later, as had happened after the six-month freeze.

If there is an irony in oil prices in India being dictated by an election in the US, a bigger one lies in the Left arguing for a deferment until after Tuesday, when Americans head to polling booths.

'There is a general perception that crude prices will ease (after the elections),' Aiyar said.

It was strange, though, that the minister himself gave the impression that the decision to postpone an increase in petrol and diesel prices was taken at the last minute.

After a meeting between Prime Minister Manmohan Singh and Aiyar last evening, a modest rise was expected to be announced today. Even the Left was apparently reconciled to this.

'We lined up our officers for calculating prices at different locations... Now everybody is being sent back,' Aiyar said.

He did not explain why this change of mind occurred, except to suggest that the process of consultation was not over.

'Today being a Sunday, we have not got full opportunity to talk to everybody (on raising prices). Consultations will continue,' Aiyar said.

Global oil markets have been on edge because of uncertainty over the outcome of the US presidential election, apart from several other factors, one of which is a fear of terror attacks.

Crude oil prices flared on speculative trading ahead of the US election, but have eased a bit since then.

Aiyar said the volatility could have been caused as measures the US might have taken to check its fiscal and trade deficits had been kept in abeyance because of the election.

He would not say if the Left had influenced the government's decision. But CPM leader Sitaram Yechury said: 'We asked the government not to raise the prices till the US elections are over because global prices are fluctuating. After the elections, the prices could stabilise.'

On paper, oil companies have the freedom to revise prices every fortnight, but have not been allowed to exercise the choice. They have been seeking an increase since July 31, when prices were last raised, but were not permitted to ' perhaps, the Maharashtra election got in the way.

It is also possible that by postponing a decision, the government is simply buying time to arrive at an agreement on absorbing a part of the necessitated price rise through a reduction in the import duty on crude oil.

Finance minister P. Chidambaram is opposed to the move. Yechury said: 'The government should consider all options (to avoid a hike).'

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