FUTILE ATTEMPT OF BJP GOVERNMENT TO JUSTIFY ASTONOMICAL RISE IN FUEL TARIFF

With both Petrol-Diesel prices conveniently passing century mark entailing phenomenal spurt in general price line that is wreaking havoc in people’s life, there is a growing resentment against the BJP government for being an indulgent onlooker to such growing plight and misery of the countrymen. Earlier, the BJP government was attributing the progressive hike in fuel-kerosene-LPG tariff to upswing in the international crude market which, it argued, was pushing up cost of procurement as, to fulfil the domestic needs, India has to import 80 per cent oil, But that argument fell through as the international crude price is hovering around $74 per barrel much lower than what it was seven year back when the BJP government assumed office. Even in October 2018, one litre of crude cost Rs 38.97 while in July 2021, it has come down to Rs 35.73. That means though international crude price has dropped by Rs 3 in last 21 months, retail price of petrol-diesel has gone upby around Rs 20. Earlier the crude price dipped below $20 per barrel but the BJP government instead of passing on the benefits to the common people went on raising excise duty and cess on oil to mop up Rs 3.72 lakh crore in the last financial year 2020-21. The second argument floated by the government was that this additional revenue is being used for people’s welfare projects and developmental activities. But that too in no time proved spurious. Now the ruling circle has come out with another reason. It says the present and the next governments have a bill worth Rs 1.3 lakh crore to pay on redemption of oil bonds. Oil bonds were issued in lieu of cash subsidy to oil marketing companies (OMCs) in former Prime Minister Manmohan Singh’s UPA era, and also during Atal Bihari Vajpayee’s NDA rule. These sovereign oil bonds, issued in favour of oil companies- Indian Oil Corporation, HPCL and BPCL, were transferable, allowing these companies to raise immediate cash at the time. The government, being the issuer, would bear the interest payments and redemption at maturity. The government has a liability to pay Rs 20,000 crore in the current fiscal year 2021-22 in the form of bond repayment and interest on the outstanding oil bonds. While for the next six years, it is stated that the government has a total debt obligation worth Rs 1.30 lakh crore. But, according to the budget documents, oil bonds worth Rs 41,150 crore are due for maturity between 2019-2024. Ambiguity galore!
Total cost of refined petrol which reaches the pumps for sale is estimated to be around Rs 40.12. Balance Rs 60 (meaning 1.5 times the cost of production) constitutes excise, road cess, VAT, dealer commission etc.) In 2014 when the BJP government took over, total excise and road cess per litre of petrol was Rs 9.20. Now it is Rs 32.90. It only bears the mark of how ‘patriotic’ and ‘pro-people’ the BJP government is. While launching GST with much fanfare, the BJP Prime Minister said that there ought to be ‘one tax for one nation’. But petrol-diesel-kerosene–LPG were kept out of the ambit of GST for reasons only the government can say. If 12% GST were imposed on Rs 40.12 (base price), a litre of petrol would have cost Rs 44.93. Even if 28% GST were applied, the retail tariff of petrol would have been Rs 51.35 per litre. Same is true for diesel also. But then how can that be if the government turns out to be a virtual swindler of public money through savage fiscal policy? (source: Financial Express-11-07-21 and ABP 15-07-21)

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