With the price of diesel in Delhi rising to Rs 79.88 and petrol to Rs 79.76 per litre, diesel price has surpassed that of petrol for the first time in the country's history. It is when international crude oil prices still remain low that in India, fuel prices are skyrocketing for the 19th consecutive day. During rule by a party that had reproached the UPA government for fuel price hikes during the time of international crude price rise, and won votes through protests on it, there is unmistakable extortion happening in fuel prices. The statement by the state minister of finance Anurag Thakur also shows that the Centre is adamant on this even at the face of stiff protests. The markets, already suffering the stress of cash crunch, are being made more complicated by the unchecked fuel prices imposed by the Centre's decisions.
At the time Narendra Modi took office in May 2014, international crude price was USD 109.10 per barrel, and in Delhi per litre price of petrol was Rs 71.51 and diesel Rs 57.28. Now when crude sells in the international market at USD 40 per barrel, petrol price is Rs 79.75 per litre. The citizen is forced to pay this much when the per litre price of petrol has to be Rs 32 going by fuel pricing economics. Every one knows that the reason for this high price is the heavy rate of tax imposed by the Centre and the states. Whenever there is a crude price fall, the Narendra Modi government keeps increasing the taxes, maintains the retail price the same or higher and fattens the exchequer. The central government raised the excise duty of diesel by 794 percent over 13 times, and of petrol by 247 per cent. All the same when the international prices rise, there is no attempt to effect a correspondent reduction in the tax component of the price. As a result, not only is there no relief during crude price falls, later people also have to bear the burden of higher net price. The magnitude of this extortion in day light will be clear when one realises that the additional revenue generated through fuel taxes during the period from 2014 to 2019 is a whopping Rs 17.84 lakh crore. The cess and taxes imposed by state governments come on top of this. As an example, Kerala's exchequer gets 30.08 per cent of fuel prices as tax from petrol, and 22.76 per cent from diesel. On an average, the state garners a revenue of Rs 330 Crore as fuel tax. It is doubtful if there is any other country that imposes taxes higher than this on oil products.
The patently exploitative pricing of fuel started with the second UPA government surrending the right to fix fuel prices to oil companies. The explanation given by the then prime minister Manmohan Singh was that the fluctuations of international markets would be reflected in the price. But the Modi government is taking the people for a ride by hiking tariffs and cess. The gains through the fluctuations in international market is being shared by the Centre and states. The benefit of lower prices during the Covid times across the globe, were all taken by the oil companies for their complete conversion of systems for switch over to BS-6. As for the central government, it has been utilising the revenue from the additional taxes to make up for the treasury's drain caused by the concessions granted to corporate taxes. Thus the fuel price hike during the Covid days underlines the fact that the party gaining by the higher fuel prices is not the common man, but corporates. The indication in the central minister of state for finance is that the fuel price of the country will go on rising until the gap in the margin of loss of the oil companies computed at Rs eight per litre is filled. Thus the price hike also tells the tale of citizens' lives being sacrificed at the altar of profits of big corporates as well as the government in the prevailing dispensation of crony capitalism. For this very reason, there is no other way to arrest the rise of fuel prices than by taking back the right to fix and control fuel prices from the oil companies – a decision for which people's movements need to come out in full steam. The crucial question is whether civic movements and political parties have the grit and fortitude to accomplish that.