WITH crude oil prices continuing to tumble from the record high of US$147 a barrel in July, it was just a matter of time before the reductions in global prices would be reflected in domestic fuel prices.

In deciding to lower petrol and diesel prices at the pump for the third time since the steep hikes in June, the government has shown understanding of the hardship of oil price increases on the public. However, while there is much to be said in favour of the government passing the benefits of the fall in world oil prices to consumers sooner rather than later, it also exposes a lack of resoluteness in carrying out its policies. As it is, according to the floating oil price mechanism announced in August, pump prices were to be adjusted on the first day of each month with effect from Sept 1. In the event, the two revisions since the monthly deadline was established have been one week and two weeks ahead of schedule respectively. While this provides speedier relief at the pump, it also smacks of ad hoc decision-making instead of the well-coordinated, well-ordered and systematic procedure for calculating oil prices that the oil pricing mechanism seems to promise.

It may be argued that in a situation like the present when oil prices have dropped drastically, it would be more beneficial to consumers to base domestic prices on weekly fluctuations rather than on a monthly average. But the problem is that not too many months ago, well-informed people were saying that oil prices could cross the US$200 threshold. Now the talk is of prices going down to US$70 or even lower. What it means is that fluctuations in oil prices seem to be the norm, and stability the exception. What it also means is that amid all the uncertainties, we could do with consistent, well-thought-out responses rather than spontaneous, knee-jerk reactions.

Since the domestic trade and consumer affairs minister seems to feel that 30 days is a reasonable enough time in which to adjust oil prices, it seems incongruous for him to seek to speed up the process. However, while he may have proposed to remove the administration of the oil pricing formula from the hands of the cabinet for the wrong reason, he is right on a point of principle. The cabinet should properly leave the execution and implementation of policy to some other agency, department or committee. It is time to put the oil pricing mechanism to work as planned.