Any government that is hell-bent on looting its own citizens deserves nothing but ridicule. Petrol and diesel price hike that happens every day, is a prime example of such an open loot. When administered price mechanism was removed by the UPA government, a policy which the present government follows with greater alacrity, it was said that fuel price will change according to the global crude oil prices. That is, fuel price in India will increase when global crude oil price increase and vice versa.
However today, when global crude oil prices are crashing and are at one of the lowest points in its history, fuel prices in India are increasing day by day. When the government allowed India’s state-run oil marketing companies to revise fuel prices on a daily basis, called dynamic daily pricing model, it was allowing itself to loot the public in stealth. The elevation of Petroleum Minister Dharmendra Pradhan to Cabinet rank by PM Modi was a recognition for his successful implementation of this policy of open loot.
On 1 March 2014, two months before Modi government came to power, global crude oil price was $108.6 per barrel and price of petrol in Delhi was Rs. 73.16 per litre. While on 11 September 2017, global crude oil price was $54.2 per barrel and the price of petrol in Delhi was Rs. 70.30 per litre. (Though we consider Delhi’s fuel price for comparison, it must be noted that in Delhi, fuel prices are less in comparison to a state like say, Maharashtra as the VAT imposed by Delhi state government is must lesser than that imposed by Maharashtra state government.)
Exchange rate is also a factor that must be considered when we compare crude oil price per barrel and petrol price per litre. But there has been rather insignificant change in dollar exchange rates between the two periods - the rupee was trading at 61.76 against the US dollar on March 1, 2014; it was 63.90 on September 11, 2017.
The major factor that explains the divergence between global crude oil prices and fuel prices in India is central excise duty. Excise duty on petrol was Rs. 9.48 per litre in April 2014, which has risen to Rs. 21.48 per litre today. While the excise duty on diesel was Rs. 3.65 per litre in April 2014, it has now been increased to Rs. 17.33 per litre by Modi government.
While we consider the share of taxes in the retail price of petrol and diesel in India, we can find that it is 55.5% and 47.3% respectively, of which the major share is central taxes, particularly excise duty.
If we compare fuel prices in India with that of other emerging nations like Pakistan, Nepal, Sri Lanka etc., we can find that they are much lesser than that in India. Our government imposes more taxes on the petroleum products and loots its own citizens like no other major nation in the world.
These facts essentially show that what our government does to us is nothing but open extortion. (Disclaimer: Though I invoke the term ‘extortion’, I am by no way alluding to the leader of BJP who was once charged with extortion.)
Money generated from taxes on petroleum products are used for development purposes is an argument that governments use often. But no government in the history has given statistics that show how this has been achieved. Like Krishi Kalyan cess imposed on us has not assuaged farmer distress, taxes generated from petroleum products cannot be expected to fuel welfare schemes. Particularly from a government that has consistently dragged its feet from spending more on welfare schemes like MNREGA and National Health Mission.
When a national level agitation against this fuel price loot is not forthcoming from the opposition parties, the onus for such a protest rests essentially on the citizens of India. Opposition to his open loot by the government is brimming in social media and many online groups are planning agitations on the ground as well. We must all take part in such protests and put pressure on the government to alleviate our burden by reducing the taxes it impose on petroleum products.
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