(This article was first published in January 2016 in the previous version of People’s Review. Due to an incident of hacking the old website was pulled down and we could only restore the old articles in this section)
The Central Government led by Narendra Modi has increased the excise duty on petrol by Rs. 0.75 per litre and excise duty on diesel by Rs. 2.00 per litre, which has made the total excise duty on unbranded petrol to rise from Rs. 7.73 per litre to Rs. 8.48 per litre, while the total excise duty on diesel is now Rs. 9.83 per litre from Rs. 7.83 per litre earlier. The government has cunningly declared that it is going to cut fuel prices by Rs. 0.32 per litre for petrol and Rs. 0.85 per litre for diesel. A cosmetic reduction that will have no benefits for the end consumers as the central and state taxes are nearly half of the price of the fuel consumers buy. The present excise duty hike is the fourth hike in the current fiscal; the last hike was announced on 2nd January of this year.
The hike in excise duty is a manoeuvre of the BJP government led by Modi, which wants to extract Rs. 3700 crore from the common people by imposing the excessive burden of fuel prices at a time when the global crude oil prices are hitting the bottom rock due to a drastic fall in demand all over the world. The government has chosen the path of imposing excessive duty on the petroleum prices rather than passing the benefits to the people reeling under the juggernaut of ever increasing inflation is due to its motive of filling its coffer with extra cash by exploiting the favourable economic situation.
Since Modi led BJP formed the government, the international crude oil market has seen a downward surge in prices, which helped the government to maximise its cash reserves as imports of fuel products became cheaper. However, due to the extensive pressure exerted on the government by the petroleum marketing lobby, which consists of the oil giants of the country now controlled indirectly by the global monopoly and finance capital owned corporations, the government has not passed any benefit of the lowered fuel prices to the people of the country.
At present the international oil prices are hovering around $29 to $30 per barrel, which is projected to increase up to $33 per barrel in this year. One barrel of crude oil consists around 42 gallon of fuel (158 litres of fuel), at current currency rates costs nearly Rs. 2066.27 for Indian oil firms. A barrel of crude oil can be refined to provide 21 gallons of petrol or gasoline (79.50 litres), 9 gallons of diesel (34 litres), 3.5 gallons of kerosene (13.24 litres) and the rest is used as petroleum by-products. The lowered prices of the petroleum products could have helped to ease the rising inflation, which is cutting the pockets of the common people severely.
More than 50 percentages of the fuel prices in India consists of either taxes imposed by the central government or state governments. The oil revenue is the lucrative source of money that the government relies on to fill its coffer with excessive cash reserves.
The present Modi regime has set a target of Rs. 69,500 crore for disinvestment in the current fiscal year, while it could only manage to gather Rs. 12,700 crore so far by selling off the stakes of the PSUs that were built with the money of the Indian taxpayers.
Finance Minister Arun Jaitley, while speaking to Economic Times on 15th January 2015, reportedly said, that the government is now reluctant to sell the stakes of the major PSUs in the market at present due to the prevailing volatility in the market. The stock market indexes are facing southwards since the global meltdown started with Chinese economic crisis. The government is looking forward for a more stabilised market in the future where it could fetch higher prices by disinvesting its stakes in the PSUs. So, to fill the deficit that is arising due to the hold on stake sales, the government is trying to rope in money through oil revenue maximisation.
The neo-liberal economic policies formulated by the Narasimha Rao government in 1992, were implemented rapidly by the Vajpayee led NDA government during the early years of the new millennium. The Vajpayee government was the pioneer in changing the fuel price mechanism in the country by allowing a transition from the controlled price mechanism to a liberal market oriented price mechanism, which gave the monopoly and finance capital owned oil giants to maximise their profit.
Advocates of neo-liberal economy continued their pitching for a total abolishment of subsidies on fuel products and to let the fuel corporations play a greater role in the market in order to extract huge super profits by exploiting the common people. The corporate media continues their rhetoric mongering against subsidies and in favour of more advantages for the monopoly and finance capital owned oil corporations, despite the fact that the fuel prices has a direct linkage with prices of food and essential commodities, which will be adversely affected if the monopoly corporations are provided a free reign.
Narendra Modi led BJP seized the power of the country riding on the anti-incumbency tide in 2014 by promising an end to inflation and fuel price hikes. The government has made a complete u turn after usurping power with 31 percentage mandate in the last general elections. Despite working on its promises, the BJP government has displayed the most naked corporate and foreign capital appeasement during its tenure. While Modi and his ministers spoke highly about economic growth, the burning fact is that the industry output across multiple verticals is facing constant downfall, inflation is rising despite low fuel prices in the international market, even service exports have fallen in the present fiscal.
The decision to increase the excise duty on petrol and diesel by the government with a show-off of reducing the prices by peanut amount has once again manifested the true nature of the BJP government, which is a government that is dedicated to serve the interest of the foreign monopoly and finance capital along with their Indian subsidiaries and agent corporate houses. Alike its predecessor Congress Party, the BJP will continue to serve the interests of the above groups unconditionally and keep on pushing the common people towards the burning hell pit of high inflation and pauperisation.