The Prime Minister Dr. Manmohan Singh today ruled out rollback in oil prices. Talking to media on board the aircraft on his way back from Saudi Arabia after three day visit, Dr. Singh said that the economy has capacity to absorb hike in prices without setting in motion any inflationary spiral. <br/><br/>He said that the increase in oil prices will affect Wholesale Price Index no more than 0.40 per cent. He said, the Opposition walkout from the Parliament on fuel price hike issue was wrong. Dr. Singh said any increase in prices does hurt some people, but we have to take a long-term view.<br/><br/>Dr. Singh made it clear following populist fiscal policies for long harm the economy. He said, sooner or later these populist policies if persisted for a long time to come will lead to the erosion of the investment climate. <br/><br/>On Indo-Pak relations, Dr. Singh said, the issues between India and Pakistan can be resolved through meaningful dialogue if only it shows reasonable attitude in dealing with terrorist elements targeting India. He asked Saudi Arabia to use its good offices to persuade Pakistan to desist from the path of terror. Dr. Singh has since returned home.