Opposition attacks govt on expensive fuel; prices may fall on global trend

The Opposition attacked the government in the Lok Sabha on Tuesday (March 23) over escalating fuel prices and rising economic inequality in the country, with a Shiv Sena MP even questioning how farmers’ income would ever double — a promise of the BJP government — when fuel prices are sky-rocketing.

While discussing the Finance Bill 2021 in the Lower House, Amar Singh, Congress MP from Punjab, at first lashed out at the growing inequality in the country, quoting the government data that showed 73% of wealth generated in the country was going to just 1% of the people. “You have given tax relief to the rich but taxed the poor,” he said, The Indian Express quoted.

Shiv Sena’s Vinayak Raut, too, castigated the government for waiving off ₹68,000 crore for the rich but not addressing the fact that 6.8 lakh companies had closed down till date and 74% small businesses had shut down during the pandemic. He demanded to know how the government was going to generate jobs when firms were getting shut down and 71 lakh EPF accounts have been closed.

Also read: Higher food and fuel prices push retail inflation to 5.03%

Amar Singh also raised the key issue of petrol and diesel prices getting more expensive each day. Blaming the Centre for shoring up its coffers by increasing the cess on everything, he requested the government to offer GST compensation on fuel to the “suffering” states.

Raut said the government was “crippling” farmers as costs of transporting their produce were spiking. “On the one hand, you talk about doubling the income of farmers, but on the other, you increase diesel and petrol prices in the name of agricultural cess,” said Raut, adding that after some initial steps, the government was ignoring the protesting farmers in Delhi and not making any move to resolve the problem.

Recalling that the late Arun Jaitley had been in favour of bringing fuel and gas under GST, Raut lashed out at the government for not taking this up. He requested the Prime Minister, who he called “a well-wisher of the poor”, to bring fuel and gas under GST to bring down the prices.

Meanwhile, fuel prices, that have remained high for some time, may start coming down. The price of global crude oil has fallen nearly 10% in two weeks. State-run oil marketing companies (OMCs) may pass on the benefit to the customers.

Also read: Shashi Tharoor pulls autorickshaw with rope to protest rising fuel prices

According to an India Today report, international crude oil prices have slumped due to weak demand stemming from rising COVID-19 cases in Europe and other parts of the world. Prices remained flat as new European coronavirus lockdowns “made a quick recovery look less likely,” said the report.

OMCs, who adjust fuel prices daily based on international crude oil rates, can leverage this new fall in global crude prices and lower domestic fuel prices. In February, Union oil minister Dharmendra Pradhan had associated the rise in consumer price for petrol and diesel in the country to the jump in crude oil prices in international markets. The reverse should work now to bring down the prices.

However, OMCs have not always passed on the fall in international crude price to customers even during the peak of the COVID-19 pandemic.

Since the beginning of the year, both petrol and diesel rates have soared by over ₹7 per litre. In Delhi, a litre of petrol is currently retailing at ₹91.17, while it is above ₹97 in Mumbai. Diesel rates have simultaneously climbed in the country selling at about ₹80 per litre in major cities. The high taxes levied by the Centre and states are another key reason why petrol and diesel prices remain high.

Almost 60 per cent of what consumers pay towards petrol and diesel go towards various heavy taxes on fuel.

Meanwhile, the government has not given any timeline to reduce fuel prices and has said that it has to be jointly discussed by states and the Centre.