Prices fuel daily challenge to government

It was under similar circumstances that Akshay had joined the ranks of the Delhi BJP president, Vijendra Gupta, who had hit the streets condemning a Rs 5.50 per litre hike effected by the Manmohan Singh-led UPA government.

If we go back a few years, the tweets and drama staged on the roads of Lutyens Delhi then still stay relevant, for, the price of petrol and diesel peaked to Rs 81.43 and Rs 72.14 per litre last week and the rates are still on the rise. The magical change promised by the proponents of Parivarthan (change) never happened on the fuel front, after the BJP stormed to power with independent majority in May 2014.

From November 2014 to January 2016, the union government had hiked excise duty on petrol and diesel nine times, but reduced only once in October last year, and that too during a period when the international crude price had been plummeting. So much so that an oil-rich country Venezuela in Latin America plunged in to an economic abyss, mainly after the fall in international crude price.

The crude oil prices might have stabilized at an international level but seldom did the benefits trickle down to the common man.

The gross revenue collection of the union government from petroleum, oil and lubricants swelled from a little over Rs 88,000 crore in 2013-14 fiscal to Rs 1.05 lakh crore in a year, the same time when the international crude price dipped from 105 USD to 96 USD per barrel. The incumbent government led by the same BJP which once squatted on the roads of New Delhi with empty cylinders over the hike in fuel price hike during the Manmohan regime is now facing the wrath of the opposition over sky-rocketing prices of diesel and petrol.

The Centre is estimated to accrue Rs 2.57 lakh crore as gross revenue collection from petroleum products in the 2018-19 fiscal year.

Going by the former union finance minister P Chidambaram’s view, “Central government saves Rs 15 on every litre of petrol due to fall in crude oil prices. Central government puts an additional tax of Rs 10 on every litre of petrol.” In his brief critique of the Centre on Twitter, the former finance minister said; “Bonanza to central government is Rs 25 on every litre of petrol. This money rightly belongs to the average consumer.” He went on to suggest that it was possible to cut up to Rs 25 per litre, but the government would not. “They will cheat the people by cutting price by Rs 1 or 2 per litre of petrol,” Chidambaram tweeted, only to be lampooned by BJP supporter online.

CPI(M) backed CITU general secretary A Soundararajan says, “If the Modi regime had not hiked the Excise Duty after assuming office, petrol and diesel price will not have increased so much. The current hike will directly affect the middle and lower middle-class. If the government fears deficit in revenue, it should consider collecting more from people who buy or use luxury cars whose prices are above Rs 30 lakh.” “It is nothing but loot. Excise duty imposed by the Centre and VAT by Tami Nadu government will jointly contribute for around 50% of fuel price. If the two taxes are revised appropriately, a litre of petrol could be brought down to nearly Rs 40 per litre,” Soundararajan said.

While the Centre is mulling over a token reduction in fuel price by cutting down duty by few points, the AIADMK regime in the State had categorically ruled out any decrease in VAT. Like the centre, which mopped up maximum gross revenue from petrol and oil, the state also gets a chunk from the VAT on petrol.

State fisheries minister D Jayakumar had reasoned that a chunk of the revenue comes from VAT on petrol and tax on liquor, while the state delivers welfare measures to the tune of Rs 77,000 crore. He also dismissed the proposal to bring fuel under GST, which, if done, would bring down fuel price by up to 30%.