Know whether the government forgot its promise by handing over the prices of petrol and diesel to the market?

Petrol Diesel Price Hike: Petrol diesel prices continue to rise. So far in the month of October, the prices of petrol and diesel have been increased 16 times. Petrol has become costlier by Rs 4.90 and diesel by Rs 5.40 per liter in October. Due to the huge increase in the prices of both the petroleum products, the common people are facing inflation every day. Despite the criticism of the opposition and the anger among the common man due to this increase, the prices of petrol and diesel are being increased every day by the state-owned oil companies.

In 2010, the price of petrol was handed over to the market.

The question arises that why is the government now retracting from its own promise of giving the benefit of cheap oil to the common people. In June 2010, the Congress-led UPA government had decided to deregulate petrol prices, that is, to hand it over to the market. Since then, government oil companies used to fix the prices of petrol. But the government’s control over diesel prices continued. Diesel was being sold at a price below the market price. Due to which the oil companies were suffering.

No benefit after deregulation

But in October 2014, the Modi government decided to deregulate diesel prices as well. The right to fix diesel prices was also handed over to the state-owned oil companies. Then while announcing this decision, the then Finance Minister Arun Jaitley had said that like petrol, diesel prices have also become market based. If the price of crude oil increases in the international market, then the consumer will have to pay a higher price and if the price falls, the consumer will get the benefit of cheap oil. But the big question arises whether the consumer got the benefit whenever the price of crude oil decreased in the international market. The answer is no.

Cheap crude oil, but does not benefit the consumer

When crude oil prices fell in the international market, between November 2014 and January 2016, the Modi government increased the excise duty on petrol and diesel nine times. Excise duty was increased on petrol by Rs 11.77 and on diesel by Rs 13.47 per liter. At the same time, due to the decrease in demand during the Kovid period, the prices of crude oil fell, so from March 2020 till now, the central government has increased the tax on petrol by Rs 13 and diesel by Rs 16 in the name of excise duty and infrastructure cess. At present, the Central Government is charging Rs 32.90 per liter excise duty on petrol and Rs 31.80 per liter on diesel. It is clear that despite the huge reduction in the prices of crude oil, petrol and diesel could never be available cheaply to the consumers.

Oil bond excuse

At the same time, from the stand of the government, it does not seem that the common people are going to get relief from expensive petrol and diesel in the near future. Finance Minister Nirmala Sitharaman has said that the UPA government led by former Prime Minister Manmohan Singh issued oil bonds worth Rs 1.4 lakh crore to compensate for the loss of state-owned oil companies. The Modi government has to pay for that and hence the government is not able to reduce the excise duty on petrol and diesel.

Crude oil will be more expensive

Now the hope of cheap petrol and diesel is also becoming redundant. The price of crude oil in the international market has crossed $ 85 per barrel. At the same time, many experts have already predicted crude oil to cross $ 90 per barrel, including Goldman Sachs.

Government’s income increased from petrol diesel

When the Modi government came to power in 2014, it collected Rs 99,068 crore excise duty on petroleum products. Rs 1,78,477 crore in 2015-16, Rs 2.42,691 crore in 2016-17, Rs 2.29,716 lakh crore in 2017-18, Rs 2,14,369 in 2018-19, Rs 2,23,057 lakh crore in 2019-20 and Rs. Excise duty collected at Rs 3.71,726 lakh crore in 2020-21. And in the first three months of the current financial year 2021-22, the excise duty collection on petrol and diesel has increased by 88 percent to Rs 94,181 crore.