Only demonetisation matters; Govt won’t tell oil cos to lower petrol, diesel and LPG prices?
Why is not the government telling the oil companies to pass on the benefits of lower rates of crude oil to the consumer by lowering prices across the board?
Global crude oil prices are at their lowest but Indian oil companies are not cutting prices. But the Union government, which had deregulated diesel and petrol pricing for oil companies, put a spoke in the oil companies liberalized world by telling it to bear the credit-debit card surcharge which comes to a percentage of the fuel bought. But why is not the government telling the oil companies to pass on the benefits of lower rates of crude oil to the consumer by lowering prices across the board?
The answer is obvious, the government doesn’t care a lemon about the consumer but is more interested in protecting its image especially after the demonetisation of Rs 500 and Rs 1000 notes which in turn led to increased credit and debit card usage at petrol pumps.
Here’s what’s been happening on fuel pricing in India: Oil companies have been constantly hiking prices for petrol, diesel and liquefied petroleum gas (LPG) despite the global trend of falling crude oil prices.
In 2017, the government on January 1 hiked the price of petrol by Rs 1.64 to Rs 76.91 a litre and diesel by Rs 1.21 to Rs 63.61 per litre.
During the UPA tenure, there’d been a 52% drop in international oil prices. The BJP had criticised the then government whenever oil companies increased fuel prices.
While the UPA government gave a subsidy to decrease the pain of the people, Modi government has been increasing the excise duty. With excise duty being hiked five times in a year, taxes and duties now exceeded the actual cost of production of petrol. As much as Rs 31.20 in the retail price of Rs 60.70 a litre of petrol in Delhi is because of central and excise duties, said a report.
With the increase in excise duties and value-added tax, the government is shoring up its revenues and keeping fuel prices high for retail consumers.
It is worthy to note here that India imports more than 80% of its fuel, and since the price of oil is plunging globally it should reflect so for the Indian consumer.
Indian prices stay high because oil marketing companies, such as Indian Oil Corporation Ltd, Hindustan Petroleum Corporation Ltd and Reliance Industries Ltd., add their margins, the Central government adds excise, state governments add their own value-added taxes, and petrol pumps get their commission. The total of these is the retail price of the fuel you pay.
So is it not pertinent to ask the government why it will interfere only to protect one man’s ego and image when it can save crores of rupees for Indian consumers by cutting fuel prices on par with global crude prices?