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Unprecedented hike in oil prices raises many an eyebrow

Unprecedented hike in oil prices raises many an eyebrowRepresentation Image
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Months of lockdown have made a lasting impact on social psyche for sure, but slowly and steadily we are limping back to normalcy with the governments relaxing strict norms imposed in their efforts to contain the coronavirus pandemic

Months of lockdown have made a lasting impact on social psyche for sure, but slowly and steadily we are limping back to normalcy with the governments relaxing strict norms imposed in their efforts to contain the coronavirus pandemic. As the nation has begun to unlock in a phased manner, things are just opening up and economic activities are set to pick up pace, the unprecedented fuel price hike has come as a rude shock. The Modi government has to roll back the oil price hike immediately.

People, who were already reeling under the aftershocks of global economic slowdown, which was followed by the unplanned lockdown in the wake of Covid-19 pandemic, are forced to bear the brunt of the burden imposed by the Modi government.

As Congress president Sonia Gandhi has pointed out, it is the duty and the responsibility of the Modi government to alleviate the hardships and sufferings of the people and not to rub salt on their wounds. The oil price hike is perhaps unprecedented in the history of Independent India. For the first time, diesel prices surpassed petrol prices. There was a time when people used to buy diesel vehicles, because diesel was cheaper than petrol. It is no longer the case under the Modi government. What is more, diesel prices have surpassed petrol prices. As a result, this is bound to impact the general price situation in the country.

Historically, crude oil prices are at a low. Crude oil prices internationally have fallen by 9 pc. As the international crude oil prices dipped to $ 40 per barrel, how does the Modi government justify oil prices hike in India and that, too, in the times of economic hardship caused by economic slowdown and ill-planned lockdown?

Normally, when the international crude oil prices go up, the domestic retail prices of petrol and diesel are increased and when the international crude oil prices fall, domestic retail prices of petrol and diesel are reduced. Benefit of the fall in the crude oil prices is directly passed on to the consumer. This is for the first time that the Modi government has failed to pass on the benefit of the fall in the international crude oil prices directly to the consumer. Instead, the Modi government is cornering the benefits for itself.

In back-to-back price increases of petrol and diesel in quick succession, the Modi government earned Rs 2,60,000 crore by increasing Excise and Customs Duty on crude oil. The cumulative earnings over the last six years of the Modi government is estimated at Rs18,00,000 crore. This is an astronomical figure, considering the fact that the people, throughout this six-year-period, have been suffering from successive shocks of demonetisation, ill-planned GST and unplanned lockdown, which have ruined the livelihoods of the people, at large.

Already the Modi government is digging into the RBI reserve gold. It is auctioning spectrum and coal blocks and earning money. Where is all this money going? Even in times like the present, where the poor are suffering a lot, why is not money being transferred into the hands of the poor, like under the Minimum Income Guarantee Scheme, or NYAY, as Congress leader Rahul Gandhi suggested it, or call it by whatever name you want.

Constantly the government tries to paint itself in a way that it does not have sufficient money. At citizen's pain, the Modi government is trying to gain. The Modi government is profiteering out of the fuel prices hike and that, too, amid the pandemic, which is a cruel thing to do.

In fact, fuel prices hike has direct and cascading effect on prices of all commodities. It contributes to inflationary pressures. It pushes up the cultivation costs in the agricultural sector. As it increases the transportation costs, general prices of all commodities also shoot up.

When the Congress-led UPA government was in power, crude oil prices were around $ 107 per barrel. At that time, retail price of petrol was Rs 71.41 per litre and diesel was Rs 55.49 per litre. Now under the Modi government, when the crude oil price per barrel is $ 40.66, petrol is selling at Rs 80.38 and diesel at Rs 80.40 per litre.

The Modi government defence is that out of Rs 10 per litre increase in the duty on petrol, Rs 8 is earmarked for roads and infrastructure, Rs 2 would be in the nature of Special Additional Excise Duty. Similarly, out of the Rs 13 per litre duty increase in diesel, Rs 8 would be earmarked for roads and Rs 5 will be in the nature of Special Additional Excise Duty. Whether or not the government uses money in the manner it has earmarked is a different matter. But the larger question is what has happened to the budgetary allocations for these areas? Why is this so-called mobilisation of funds required for areas which already enjoy budgetary allocations? Now the question arises, where is all this money really going?

Surprisingly, the BJP tried to play politics pointing out that some States imposing local taxes like VAT on fuel and that VAT should be lowered or dropped. Now, this is a very peculiar demand. On the one hand, the Centre is neither releasing the GST share due to the States, nor is it paying up GST compensation amount due to the States. When the States are starved of funds and forced to raise some amounts, it cries foul. In fact, bigger burden on petrol and diesel prices is the Customs and Excise Duties, which must be rolled back by the Modi government.

As the principal Opposition party, both inside and outside Parliament, the Congress is vigorously protesting against the petrol and the diesel price hikes. It is standing by the side of the suffering people, who are under a double whammy of economic slowdown and ill-effects of the lockdown. People are already in deep distress due to coronavirus pandemic. Earlier, they were reeling under the impact of the economic slowdown, which resulted in job losses, shutting down of Micro, Small & Medium Enterprises (MSME) units in different parts of the country. In such a situation, the Modi government should have been more sensitive to the plight of the people.

It is the duty of the government to reduce suffering and hardship and not to cause them to people. Is Prime Minister Narendra Modi using this money to finance his package for people? On the one hand, Prime Minister Modi talks about package for the people and on the other hand, he hikes steeply petrol and diesel prices, which hurts the common man.

(The writer is AICC Secretary and former MLC. The views expressed are personal)

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