By K K Muktan
Prices of petroleum products have hit an all time high in Indian history. The rise and fall of oil prices had been a common phenomenon in the past too and happened due to the fluctuation of crude oil prices at the source. But after the NDA government has come to power in May 2014 the prices of petrol and diesel have taken an ascending course, never coming down. Now the price of petrol in Delhi has shot up to Rs. 77.17 per litre, in Mumbai Rs. 84.99 per liter, in Kolkata Rs.79.83 and in Chennai it recorded Rs. 80.11 per liter, the highest ever in history in all the above metro cities. In Shillong petrol price per litre has soared to Rs. 76.54 and diesel to Rs. 68.14 per liter as on May 23, 2018.
During the UPA government, with a little rise in petroleum prices the opposition parties raised a hue and cry. Narendra Modi promised to bring down prices of all commodities if BJP is voted to power. But today the NDA government is putting the blame solely on the rise of crude oil prices by the oil producing countries. True, the OPEC policy on supply of crude oil is the primary reason for the fluctuation in the price of petroleum products but the Congress led UPA government succeeded in maintaining the oil prices at even keel despite crude price fluctuations so that citizens are not abnormally hard hit. The incidence of Central and state government taxes were the instruments for normalizing oil prices in the country which were kept at low rates so that the pressure on consumer was not too high. But now under the NDA government for every litre of petrol the consumer has to pay more than 50 % of its value as Central and state government taxes. For example, for one litre of petrol costing Rs 70 the Central and state taxes amounted to Rs. 36.30 and oil price came to only Rs. 33.70 = Rs. 70. Levying of taxes on the consumers for more than the value of the product itself is not, at all justified on the part of Modi government which promised for Achchey Din during election campaign. Even if it were a private company the profit would not have amounted to more than half of product price.
The oil prices prevailing now in and around India’s neighbouring countries are much lower than in India because, the incidences of tax levied there are much lighter than in our country. The following table explains the matter.
Bhutan —- petrol per liter Rs. 52.00
Nepal —– Petrol per liter Rs. 66.00
Bangladesh — Petrol per liter Rs. 68.00
Pakistan — Petrol per liter Rs. 50.00
Sri Lanka — Petrol per liter Rs. 49.60
The very question as to how the above countries can afford to sell petrol at such low prices provides us with answer that the government of India is levying unjustifiably heavy taxes on petroleum products, even when the crude prices were lowered by the OPEC. Land-locked countries like Nepal and Bhutan, mentioned above, received petroleum products via India and even then they could manage to sell them at much lower prices than in India for the welfare of their people. It is learnt that Indians living on the borders of the above two countries draw their requirement of petrol and diesel from across the borders at almost half the rates. Some of the unscrupulous Indians even smuggle out petrol/diesel into India and sell them with profits undetected by the Central Excise department or the police for that matter.
Five years ago during the UPA government the crude prices were 40 per cent costlier than subsequent years. In July, 2013 crude oil price for Bent was $ 109.71 per Barrel which came down to $ 106 in July $ 2014 per Barrel, and the price further dipped down by 40 per cent in 2015. In December, 2017 crude price for Bent was $ 66.2 per Barrel which came down to $ 60 in 2018. Thus, it is seen that the rates of crude oil came down year after year from 2013 to 2018, whereas the prices of petrol/diesel increased continuously through levy of higher taxes, meaning thereby that the Modi government increasingly sucked the peoples’ money depriving them of the benefit that came their way when the crude oil value decreased. This is obviously an act of breach of trust against the citizens of India in violation of assumed memorandum of understanding that the rates of oil should go up and down with every fluctuation of the crude oil prices.
The government continues to increase oil prices on both occasions when crude prices go up as well as go down, appropriating the amount of differences that accrue due to fall in crude prices. At the same time the rates of taxes are also on the increase. The Central tax on diesel has increased more than three-fold while the tax on petrol has doubled. After the NDA government has come to power tax on petroleum products has become regular source of government income. In 2014-15 the Centre earned Rs.1.3 lakh crore from taxes and duties on petroleum products which increased to 117 per cent in 2016-17 with the income of Rs, 2.7 lakh crore. The Central government has increased excise duty as many as nine times between November, 2014 and January 2016 while it cut down the tax just once in October, last year.
Understandably, the petroleum price hike is not an issue only for the vehicle owners but it is also equally important issue for the entire citizenry. The price rise will impact on the prices of essential commodities and services and will have a far reaching cascading affect down on the consumers of goods and services through the network of transport and communication agencies across the country. The prices of essential commodities like rice, oil, dal, sugar, onion and vegetable which are transported from one end of the country to the other end will go up affecting the poor people. This fact is very well known to Mr. Narendra Modi and Amit Shah, the two BJP Generals of every electoral battle for which they had ordered moratorium to price hike of oil during the last Karnataka Assembly election. There was no escalation in oil price for nineteen days from 23 April to 12 May, 2018 lest the opposition parties (Congress and Lok Dal(s) get an issue against them for the upcoming election. The prices of petrol and diesel remained static in Karnataka and across the country for 19 days till 12 May, 2018 being, the date of polling in Karnataka, and the very next day on 13 May the prices jumped up by 18 paise per liter for petrol and 21 paise per liter for diesel.
Imposition of high taxes on petroleum and raising huge revenue for wooing the voters through various development projects is also an important strategic programme of the BJP government for the upcoming general election of 2019. Populist projects like distribution of gas cylinder to village women through attractive programme named Pradhan Mantri Ujjwala Yojana has been already started. However, we have no objection to such good works if it is not politically motivated. The NDA government has started raising petroleum price on daily basis right from the May 13 itself, bit by bit in paise so that people will not feel the economic jolt and raise objection against it. The escalation of oil price and putting economic burden on the masses is purely motivated by political end in view and not at all because of rise in crude oil and therefore, this design should be opposed tooth and nail by all people, political parties and organizations.
The larger benefit for greater number of people would be ensured only with reasonable level of oil prices and availability of essential goods and services at affordable costs for all concerned.