Why India’s energy policy needs to be politically neutral


In a developing country like India where an average person is concerned about his savings and expenditure more than anything else, the government was bound to draw flak for its disastrous energy policy. The socialist policies of the Modi government post-2014 have increased the burden on the pocket of a common man, especially in terms of fuel prices. After coming to power in 2014, Modi government raised taxes on transportation fuels many times and also proceeded on to eliminate diesel subsidies.

The common man, who was already undergoing persecution over increased taxes, became bewildered at this newly imposed burden. India saw a Rs. 91.20 per liter for petrol and Rs. 80.10 for diesel which was a record in the memory of an average Indian. But since India is an electoral democracy and no party can gain or remain in power by attacking the very foundation of a common man’s woes, BJP government had to cut down on excise duty by Rs. 1.50 per litre from 19.48 rupees on petrol and from Rs. 15.33 rupees per litre on diesel.

In an effort to appease the voters, the government had to upset the public-sector refiners by asking them to share the burden of 1 rupee per litre from their pockets, but it was the only way to avoid State subsidies and government had to make a choice.

The biggest trouble BJP government is facing right now is that, it has taken a huge step by lowering the oil prices in the current year as compared to 2017-18 because it had to lure the voters in 2019 Lok Sabha elections. But it is cynical to imagine that crude prices will remain low in the future as well. To make things worse, OPEC producers, in an effort to raise the prices, have decided to constrict the production and increase demand. Moreover, the dispute between US and China could very well influence the investors leading to a jump in crude prices.

Both BJP and Congress are holding back on giving statements about oil prices in their pre-election rhetoric because both the parties are aware that international crude prices are something beyond their collective control and it would be unwise to make a promise on something they cannot possibly influence.

India stands on the brink of an energy crisis and the political leaders need to understand this. With world becoming less and less dependent on fossil fuels every passing day, India needs to come out not only as a recipient but also a producer of surplus energy. This problem is not temporary or spanning a few months, India needs an energy policy that provides a secure future for coming decades in the wake of technological transformations globally.

At this moment, it is crucial that the Indian political parties take this issue at face value and not let their internal conflicts cloud their judgment. It also needs mentioning that since India is the third largest importer of oil, it has a say in both OPEC and non-OPEC countries alike.

With such a huge market for oil and fossil fuels, India also houses huge industries and a large number of vehicles emitting harmful gases. This is having a devastating impact on the environment all over the country, especially in the capital region of Delhi-NCR, where particulate matter has reached emergency levels. This pushes for cleaner fuel rules and increased consumption of biofuels while also investing in electric vehicle sales. Until the time that India does not have mass transit system completely independent of fossil fuels, such measures would not only ensure a healthy environment but would also decrease India’s dependency on OPEC alliance. All the political parties in India must join hands and form a collective initiative to achieve this goal of sustainable development; we owe this to our future generations if nothing else.


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