Petrol price hike — National strike
Today I’ve had to forcibly take a day off from work because the BJP government in Karnataka has put its weight – and lumpen footsoldiers — behind a national strike protesting the recent (mid-June) 5-7 percent increase in petrol, diesel, kerosene and cooking gas prices. Curiously I am in agreement with the BJP and the communist parties about the timing the necessity of the fuel price increase.
The Congress-led UPA government’s rationale for raising fuel prices is that the global prices of crude oil have risen and local derivative prices need to rise commensurately. But the intelligent argument against the sky-high Indian petrol and diesel prices is that the major components of their price structures are made of of taxes. According to a calculation made by us in EW, the ex-refinery the pre-tax price of refined diesel would be a mere Rs. 19 per litre. But because of customs duty on imported crude, and heavy excise imposts on refined diesel, sales tax imposed by the states etc, the price more than doubles. The question that needs to be asked is where’s all that money going? Answer: into wasteful government expenditure, to pay for the private airline of ministers, their motorcades, Z-Security and leaky programmes such as NREGA etc.
The official argument that petrol and diesel prices in India should be the same as Europe is ridiculous. Their per capita incomes are $ 30,000 plus while India’s $1,000 with some 700 million citizens earning less than $1 per day. Yet because of the cascading effect of diesel prices, the poorest Indian citizens have to pay more for food as farmers’ cost of getting produce to market has to rise. In the circumstrances the logical option is to reduce government taxes on transport fuel and cut government expenses down the line. Justice, equity and reason dictate that rising crude oil prices should not be passed on to the citizenry and to slyly increase government revenue. What a shambles. And the media too supports the price hike without debating ridiculously high taxes on petrol, diesel and their cascading effect on the prices of food, manufactures and even services. Nor is runaway government expenditure to little effect questioned. Wake up, folks!
Dilip Thakore