Could a Politician Bring Down Petrol Prices in India?
The recent hike in petrol prices in India has sparked debates among political circles, with the blame game casting a wider net. While the current government, headed by Prime Minister Narendra Modi, has been under increasing pressure to address the issue, theoil minister Dharmendra Pradhan has manually pointed fingers at the previous government, attributing the current fuel crisis to a myriad of financial obligations. This article delves into the reasons behind the petrol price spike and discusses whether a political intervention could sway the tide.
Main Reason Behind Petrol Price Hike
According to Union Minister of Petroleum and Natural Gas, Dharmendra Pradhan, the reason for the price hike is mainly due to global crude prices. In a recent statement, he has admitted that the Petroleum and Natural Gas Ministry has to bear the burden of oil bonds worth crores, left behind by the UPA (United Progressive Alliance) regime. These bonds, which were issued to oil companies to prevent them from increasing retail prices, have led to a significant increase in petrol rates. The bonds include both principal and interest payments.
Blame Game: Previous Government's Legacy
The minister's criticism extends to the past, specifically targeting the former Prime Minister Manmohan Singh-led UPA regime. In a heavy-hitting statement, he accused the UPA for leaving behind these oil bonds, making the current government responsible for repaying them. The government claims that this legacy is the primary reason for the current fuel price situation in the country. However, some politicians, such as Congress leader Amitabh Dubey, have countered these claims, suggesting that the UPA regime's policies are not solely to blame for the price hike.
The Role of GST and Taxes
In addition to the oil bonds, the government has cited various tax laws, including the Goods and Services Tax (GST), as playing a role in the price hike. According to Pradhan, the GST Council, which is responsible for determining GST implementation, has not yet decided whether to include fuel under the GST. Currently, the central and state taxes make up 60% of the retail selling price of petrol and over 54% of diesel. The Centre levies 32.90 per litre of excise duty on petrol and 31.80 per litre on diesel, contributing significantly to the final price.
National Pressure and Action
The increasing fuel prices have put immense pressure on the Modi-led government to take action. In the past, the government has cited oil bonds as a reason for not lowering taxes. However, with international crude prices continuing to rise, the government is expected to find alternative solutions. One possible approach is to bring fuel under the ambit of the GST, which could potentially reduce overall prices. However, this move requires consensus from the GST Council and might face opposition from various stakeholders.
Other measures could include revising the tax structure on petroleum products or negotiating better terms with oil companies. The government must also consider long-term strategies to stabilize oil prices, including diversifying energy sources and increasing domestic production.
Conclusion
The issue of increasing petrol prices in India is complex and multifaceted, with both domestic and global factors contributing to the price hikes. While a change in political leadership or a new political push could potentially bring about reform, it is crucial for the government to work on a holistic strategy to ensure sustainable and affordable fuel prices for consumers. As the debate continues, the focus should be on finding a long-term solution rather than a quick fix.