Petroleum Minister Mani Shankar Aiyar's letter to Finance Minister P Chidambaram protesting against divestment in even "mildly profitable" public sector undertakings is not new.
But coming as it does at a time when the finance ministry wants a hike in petroleum prices, opposed by Aiyar, who wants the finance ministry to cut excise duty on petroleum, is significant.
In fact, it has become a kind of a trend in the Union Cabinet to have these face offs especially when it comes to important economic issues, especially with regard to divestment proposals.
Aiyar's move is being perceived as a way of affecting a quid pro quo with regard to divestment vis a vis petrol price hike.
According to top sources in the government, when the divestment of Bharat Heavy Electricals Ltd and Maruti Udyog Ltd was brought up at a Cabinet meeting few months ago, the move was opposed tooth and nail by the two Cabinet ministers from West Bengal, Pranab Mukherjee and Priya Ranjan Dasmunshi.
The two argued with the finance minister that divestment in these PSUs would bring the government into a direct confrontation with the Left. The Left would whip up an election issue out of this in West Bengal and Kerala, soon to go to polls.
"Mukherjee said elections in Bihar, West Bengal and Kerala have to be over before such a move can be contemplated," said the source.
According to sources in the petroleum ministry, Aiyar has been reluctant to raise petroleum prices and has been asking that the finance ministry contribute to the subsidy by sacrificing its share of excise duty.
"The fact that petroleum companies can unilaterally hike prices without going to the Cabinet, yet the matter is being brought before the Cabinet proves the minister's reluctance," said an official.
Whether or not this reluctance is due to the upcoming polls in Tamil Nadu is debatable, because of the Congress' marginal presence in the state.
However, it is not the first time that a better bargaining position on inter-ministerial matters is being jockeyed for by a very public face offs.
It will be interesting to see if the finance minister buckles under pressure. The Cabinet is slated to discuss the petrol price hike on Monday.
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