While there might be infinite dismay among common people over the current fuel price hike, the reality is that the country is passing through an era where it’s nothing unusual, rather the new normal. In at least 6 states, petrol prices have already crossed the psychologically-fearful Rs 100 mark and diesel now at Rs 94/95 is trying hard to catch up fast. 2021 is really proving to be the year of records- for more than 45 times since January, prices of these two essential fuel items have increased and it can be remembered that it was only for a month and a half (March, April) when five states/UT went to the polls, a temporary respite was observed. However, it was feared that the rise would resume after declaration of election results, which is now proving true. As there are no state elections for the next 7-8 months, a ‘bumper’ should not be expected even if per-barrel international crude oil price undergoes a major fall. The ready-made explanation that invariably links India’s fuel price jump or fall with international situation is left with little credence. The determining factor is the tax component and unless it’s reduced, the common man’s nightmare will continue.

It’s true that per barrel international crude oil prices are now hovering around $71 per barrel which is an increase of about 37 % from the January 2021 price of $51.8. If this is claimed as the sole factor for the exorbitant rise of petrol and diesel, then what explains the 2013 scenario when retail price of petrol in India was around Rs 65 per litre despite the fact that per barrel international price was $ 101 then? There is no credible explanation also why the Indian consumers were deprived of the benefit of the unprecedented fall in international crude oil prices in April 2020 ( it actually went negative). May 5, 2020 will always be remembered since the Centre hiked the excise duty on petrol by Rs 10 per litre and on diesel by Rs 13 a litre, the steepest-ever single-installment hike in transport fuel in India. All gains arising out of this global price fall that were to be enjoyed by the citizens were blocked as a result of this decision. The ‘international factor’ narrative is thus no longer believable. The root cause is tax and if the current Central:state ratio (with variations from state to state) continues to remain at around 58:52, consumers will remain at the receiving end. 

Both the Centre and states must think seriously and hunt for viable solutions, be they reducing taxes or bringing once more the earlier price control mechanism of petrol and diesel which was decontrolled in 2010 and 2014 respectively.

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Kenter Joya Riba

(Managing Editor)
      She is a graduate in Science with post graduation in Sociology from University of Pune. She has been in the media industry for nearly a decade. Before turning to print business, she has been associated with radio and television.
Email: kenterjoyaz@easternsentinel.in / editoreasternsentinel@gmail.com
Phone: 0360-2212313

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