Petro Minister Won’t Cut Price, Wants OPEC to help

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Prices of petrol and diesel remain high in the country after reaching record heights in the past weeks. The price of petrol had last month breached Rs 100-mark in two places in Rajasthan and Madhya Pradesh.

Petrol in the national capital sells at Rs 91.17 per litre while diesel is available for Rs 81.47. In the financial capital Mumbai, petrol is retailing at Rs 97.57, while diesel costs Rs 88.60, as per data available on Indian Oil Corporation’s website.

Prices of cooking gas also received several hikes over the past few weeks taking the price of domestic LPG cylinder to Rs. 819 in Delhi and nearly Rs.900 in many states. The government has slashed subsidy on LPG in the current budget while there are also reports of subsidies not being credited to the accounts of beneficiaries.

Amidst the woes faced by the common man over the price of fuel the government has shown no interest or indication of a price cut. Instead the government has maintained that the prices of fuel are decided by Oil Marketing Companies (OMCs) as per international market rates and since there was a production cut announced by OPEC the prices of fuel have increased in the recent weeks. However, when the prices of crude oil fell internationally during the global lockdown the government did not pass the benefit of reduced oil prices to its people but increased excise duty on fuel to bolster the already declining economy.

Instead of reducing excise duty and taxes on fuel for the benefit of the distressed citizen the Oil Minister Dharmendra Pradhan has blamed OPEC for cutting oil production. He has made an “appeal” to Saudi-led OPEC to ease production curbs and expressed “disappointment” over OPEC’s decision to continue production cuts in April.

OPEC has replied that New Delhi should utilise the oil reserves that it purchased “very cheaply last year” when the average price of crude oil was just $19 per barrel.

In June 2020, the Minister had said “Congratulations, Your Excellency” after reaching an agreement with OPEC to cut oil production that would stabilise oil rates and help in assisting economic “recovery”.

With taxes accounting for the bulk of the retail selling price of petrol and diesel the revenues collected on the two fuels rose from Rs 52,537 crore in 2013 to Rs 2.13 lakh crore in 2019-20 and swelled further to Rs 2.94 lakh crore in the first 11 months of current fiscal year.

The government currently levies Rs 32.90 per litre excise duty on petrol and Rs 31.80 a litre on diesel. The excise duty on petrol was Rs 17.98 a litre in 2018 and Rs 13.83 on diesel. In 2014, the excise duty on diesel was Rs 3.56 and that on petrol was Rs 9.40.

The central government’s total excise collection from petrol, diesel, ATF, natural gas and crude oil has increased from Rs 2.37 lakh crore in 2016-17 to Rs 3.01 lakh crore during April-January 2020-21 yet the government will not cut taxes on fuel now that citizens are overly burdened because that would upset the happy “figures” projected by the government.

Congratulating OPEC for assisting in the “recovery” at a time when the prices fell globally but blaming international market when the prices have risen is a weak pretext offered to the sound judgment of citizens who go to vote in 5 Assemblies.

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