Fuel price cut.

The finance minister's recent announcement of fuel price cuts will provide some welcome relief to a country that is feeling the crush of record inflation, yet it still feels like a drop in the ocean. For one, the drops of Rs8 on petrol and Rs5 on diesel only represent reductions of about 3% and 2%, respectively. The government's defence is that the reduction has come despite no significant change in international prices, but despite some erratic movement, prices have actually declined by about 4% since the previous fuel price reduction was announced in mid-May. At the same time, the dollar rate - at least the official rate - has been consistent at around Rs285.

Meanwhile, the government has forced itself into a corner with tall claims about how Russian oil imports would miraculously bring down fuel prices. Now that we are on the verge of receiving our first shipment of Russian oil, the petroleum minister is trying to bring down the same public expectations that the PDM and PTI governments spent years building up. Maybe this criticism could have been avoided if Russian imports had not been painted as a silver bullet...