Former Finance Minister P Chidambaram today criticized the government for fuel and diesel prices, saying that the recent "break" was due only to the Karnataka elections that had come to an end on Saturday. "There we are again, more taxes on gasoline and diesel, more burden on the consumer, the Karnataka election was just a break," tweeted Chidambaram.
The 19-day freeze on gasoline and diesel prices, the Oil Marketing Companies (OMCs), increased gasoline prices by 17 paise per liter on Monday, while the diesel price was raised by 21 paise. The move comes to election in Karnataka 2 days after the election.
Fuel prices have remained stagnant in recent weeks. Now that Karnataka polls are over, gasoline and diesel prices are likely to continue to rise. While gasoline prices have reached a 56-month high, diesel is at an all-time high. The price of gas in Delhi was raised from Rs 74.63 to Rs 74.80 per liter, while the diesel rates were raised from Rs 65.93 to Rs 66.1
Although PSU oil companies often freeze fuel prices before surveys, the government denies playing any role in playing it. State oil marketing companies have lost an estimated 500 rupees when they took the higher input costs due to high oil prices and fell in rupee against the US dollar. The OMCs falling back on daily price revision could push up gasoline prices further as a result of rising international crude oil prices and a weakening rupee.
Oil PSUs also refused to acknowledge whether the freeze followed a government dictate to help the BJP Karnataka. Indian Oil Corporation (IOC) chairman Sanjiv Singh said last week that oil PSUs' decision to freeze fuel prices should stabilize and coincidentally coincide with the Karnataka election. He argued that fuel prices rose daily from 25 to 35 paise, leading to a change in fuel prices of Rs 2 or Rs 3 every 15 days. "That was unrealistic, so we thought about stabilizing that, and reducing it to some extent, and now coincidentally coincided with some of the state elections – it was not the intention (of oil marketing companies)," he had said , Oil Minister Dharmendra Pradhan denied reports last month about a policy whereby oil companies should absorb at least a one-liter increase by not increasing prices in line with costs
Fuel prices at state fuel traders such as Indian Oil Corp (IOC) were cut to 1-3 paise each day in the first half of December 2017, before Gujarat went to polls.
They began immediately after voting for the Gujarat elections, which took place on December 14, to speculation that the government might have asked oil companies to hold the prizes.
State oil companies in June last year have dumped the 15-year practice of revising interest rates on the 1st and 16th of each month and instead have adopted a dynamic daily rate. Revision to If this practice had been obeyed in word and deed, the Gasoline and diesel prices have to be increased by 1.5 l / l in the last 19 days, said an analyst watching the sector.
The government exempted the gas price from its control in June 2010, and diesel rates were liberalized in October 2014. Since then, prices have been more or less in line with international exchange rates, with a few exceptions such as those before a decisive election.
Finance Minister Hasmukh Adhia and Economy Minister Subhash Garg have ruled out an immediate reduction in excise duties over the past few weeks to offset increases in the international oil price.
The BJP-led government has increased excise duty nine times nine times in 2014 and January 2016 to shore up finances as global oil prices fell, but then cut taxes just once in October last year by Rs 2 per liter ,
The government had between 2 November 014 and January 2016 increased the excise duty on gasoline at 11.77 rupees per liter and that on diesel at 13.47 rupees per liter to eliminate profits from falling global oil prices. As a result, its excise duty in the years 2016-17 more than doubled from Rs 99,000 crore in 2014-15 to Rs 2.42 billion crore.
The central government had lowered excise duty in October 2017 by 2 rps per liter, as petrol price reached Rs 70.88 per liter in Delhi and diesel Rs 59.14. Due to the excise duty reduction, diesel prices rose to 56.89 rupees per liter on October 4, 2017, and the price of gasoline to 68.38 rupees per liter.
However, a global rally in crude oil prices led to significantly higher domestic fuel prices these stages.
with PTI input