When the petrol and diesel prices in the country are heading to an all-time high, the silence maintained by the central and the state governments as if they are oblivious to the happenings, is akin to betraying the people.
The hike in diesel price to Rs 70 in Kerala the other day warns that the consumer state would be plunged into extremely rare inflation and recession. Petrol price has crossed Rs 77. With the lifting of government control on oil prices, the reason for the boiling fuel price is the companies taking undue profit and the central and state governments imposing heavy tax burden on the people in the form of excise duty. It was after the Narendra Modi government approved the daily revision of petrol and diesel prices in June 2017 based on the fluctuations in the crude oil prices in the global market, that fuel prices began to rise uncontrollably. The reasons for the present situation are that the consumers never receive the benefits of low prices in the global market and those in power at the Centre and the state display an approach of putting people in misery by hiking up excise duty. . One could comprehend the scale of extortion indulged in by the government from the very fact that the excise duty on petrol and diesel had increased twelve times by 105 per cent and 240 per cent respectively in four years. On March 1, the petrol price in the state was Rs 72. The price rose by five rupees in a single month. During the tenure of UPA government, when the crude oil price was $ 125, the price of petrol in India was Rs 60. It is when the crude oil price is below $ 72 in the global market, that Rs 77-80 is being levied. If this all too evident looting of public, jointly carried out by the oil companies and the Centre as well as the state governments is allowed to continue, we will be witness to the general public being roasted in boiling oil.
Among the south Asian countries, India charges the highest fuel price. Although the Ministry of Petroleum and Natural Gas had sought a reduction in the excise duty considering the inflation in the global market, Finance Minister Arun Jaitley did not pay heed to the suggestion in the budget session held in February. And thanks to that, unlike our neighbouring countries, a phenomenon evolved of almost half of the oil price going under the head of duty. Jaitley hiked the excise duty on fuel nine times between November 2014 and January 2016. Meanwhile, cutting down the duty only once, by Rs 2 per litre in October last year, proved futile. The state levies a tax of 32 per cent in the name of Kerala General Sales Tax. When prices go up, even the governments championing the proletariat are not prepared to forsake the additional tax revenue. This was not the case with the previous UDf government. The depreciation of the rupee against the dollar plays a major role in the rise of oil prices. In our country which imports 83% of its crude oil requirement, even a slight variation in exchange rate will get reflected in petroleum prices. Although there has been a 28-dollar fall in crude price, not much difference was visible in the price of products, only because the government allowed oil companies to reap exorbitant profits. Some statistics indicate that the profit of oil companies is close to Rs 200 crore per day. The report by Comptroller & Audit General mentions that the profit made by these companies during the period 2007-17 was Rs 50,000 crore.
In the backdrop of the hike in prices of diesel and petrol by Rs 12 and 10 respectively over the last nine months, the warning being conveyed is that it may not take long for both prices to cross the hundred-rupee mark. Although the Finance Minister had given a promise that with the application of Goods & Services Tax (GST) for petroleum products too prices will come down, the fact that not even preliminary discussions have been initiated in that direction speaks for the foul play of the government. If fuel prices go uncontrolled at present rates, it will definitely inflict a heavy blow on the economy of Kerala. When trucks increase freight rates in proportion to fuel prices, prices of goods are bound to rise steeply. This will in turn affect the construction industry which is already in recession. Prices of food commodities and vegetables will also go out of control. Industrial sector dependent on fuel is in a state of depression. In the absence of a radical change in the state policy that sets its eyes solely on increased tax revenue, those at the helm should realize that the state will be moving in reverse gear. The citizenry have the right to protest against the anti-people policies of rulers. It is high time that that right is exercised through democratic means.