MillenniumPost
Insight

Pumping up the ante

Try as we might, we are struggling to find a reason for the bloat, but we are acquiescing and waiting for the next blood-stroke. The bludgeon of petrol and diesel prices is maiming us, repeatedly. Why? Is it because the ‘powers-that-be’ feel that the everyday Indian is now fair game?

Pumping up the ante
X

I waited and waited. And then I waited some more. For someone or the other amongst my learned brethren reporters to write an epitaph on what is happening at my country's fuel stations; 'petrol pumps' as we fondly (or now dreaded-ly) call them. But no, apart from a few cursory, straitjacketed reports on rising prices, there's next to nothing in most sections of the media on India's fuel apocalypse. This left with no option but to pick up the cudgels and a scythe, for someone has to bespeak the turmoil and plough the field. Petrol has trotted to a swashbuckling century and beyond, while its long-time surrogate diesel has stopped its obedient trot, choosing instead to gallop, finally (b)reaching the Rs 100-milestone last week, in Sriganganagar's Kesarisinghpur district.

This is my new India, an India where around 60 per cent of the price of these predominantly 'driving' fuels is now made up of central excise duties and state VAT (value-added tax). Get a load of this – of every Rs 100 spent on petrol or diesel, around Rs 60 is made up of levies that fall into the central and state kitties. If we talk just the Central Government, the average excise duty collected for every liter of petrol sold at the vends stands at Rs 32, while diesel follows close behind, eking out an equally impressive Rs 31.80 per liter. States too impose VAT on both fuels and that makes up the rest in this taxation slug-fest.

Trying times, these

Ask the authorities the reason for this runaway growth and we are given so many different answers that by the time mental osmosis kicks in and we analyze the responses, we realize that there is no sense in any of the glib replies. Here are a few of the replies given by the authorities over the last few years, which have led to the dubious centuries by both fuel types. 'International prices' have been oscillating, even rising, we are told; this is absurd, since global crude prices today are well below their historic highs, while the price of petrol and diesel are at all-time highs. There is 'lower output' now amongst OPEC (and non-OPEC countries) is another explanation, again a head-turner and -scratcher. The 'price is not in our control' is a dismal third.

Other reasons for the skyrocketing fuel prices border on the bizarre and messianic, particularly as these are official statements from the authorities. Do please check them out. We have been told that petrol and diesel prices are high because of 'Winter', 'Typhoons and Thunderstorms', 'Gareeb Kalyan Yojana', 'Kisaan Samman Yojana', expenditure on 'Primary Healthcare and Education', the 'Coronavirus Vaccination Program', 'Infrastructure and Highway Construction Works', 'Central Issues', 'State Issues', and because of 'Vikas' (development).

The above leads to a very basic, primal question, even given the caveat that the economy has been on a downswing for nearly 36 months and that the Coronavirus pandemic has only accelerated the slide. Are increasing earnings through higher duties on petrol and diesel the only means to shore up public coffers? What about the larger long-term impact on the economy, and the debilitating immediate hit on the everyday Indian?

Final absurdity

Here's a final absurdity – it is all 'because of Rahul Gandhi', top leaders stoutly announce in-camera and on the record, emphasizing that Congress-led states like Maharashtra, Rajasthan and Punjab have very high fuel prices. Yes, the authorities are somewhat right, in that some state governments do impose higher VAT than others on fuel products. But then, when most Indian states do not get their GST dues for months and the next-best revenue-generator, our liquor shops, are shut down for months due to COVID lockdowns, revenues have to be generated from somewhere to keep the machinery running. Do remember, these same states, along with all others in the country, were asked by the Central Government not so long ago to negotiate themselves with global vaccine producers for their individual requirements of the life-saving jabs.

Admittedly, the Government has been spending big on people, as some numbers tell the tale. Rs 35,000 crore is being spent on vaccination, we have been informed. The Center will be distributing free foodgrain and other edibles worth Rs 100,000 crore to the weaker sections over the next eight months, it has been announced. In June 2020, it was revealed that cash assistance was being extended to 42 crore people amounting to a total of Rs 65,454 crore, all of it through Direct Bank Transfers. Point taken and noted…

The explanations began in September 2017, when the Government said that rural development, drinking water, primary healthcare, education, highway development and the modernization of Indian Railways were the primary reasons for the rising fuel prices in the country. The logic extended was that expenditure on these was high, and hence taxes were being notched up. Thus it has been for four years now, that every time anyone has asked answers on rising petrol and diesel prices, we have been blessed with these mini-Budgets and ephemeral nuggets and vignettes.

A tough today

Admittedly, we are going through a rough time today, especially over the year-plus of a once-in-a-century pandemic. The Coronavirus tragedy has seen a desperate need to raise funds and collections, with businesses and Government revenues sliding to historical lows and expenses rising exponentially. Agreeably then, the money residing with the exchequer has to come from somewhere. But a single-minded focus on the lowest-hanging fruit, the common man and his inevitable spending on petrol and diesel for even basic transportation, is quite bizarre.

Let's take a closer look at the numbers. In the last 27 days, the price of petrol has risen by Rs 6.61 and the maximum price in the country today stands at an excruciating Rs 108 per liter. Diesel has decided to keep pace and has now breached Rs 100-per-liter retail price in parts of India. In terms of excise collections by the Government, they stood at Rs 17.98 per liter for petrol and Rs 13.83 for diesel between October 2018 and September 2019. As on February 2, 2021, these excise collections were Rs 32.90 per liter of petrol and Rs 31.80 per liter of diesel, an increase of 83 per cent and 130 per cent, respectively.

More numbers, you say? The Central Government's excise collections from the sale of these two fuel types increased from Rs 52,537 crore in 2013-14 to Rs 2.13 lakh crore in 2019-20 and then to Rs 2.94 lakh crore in 2020-21 (11-month period). That's almost a six-fold jump in just over as many years. Petrol alone has seen the Government's earnings zooming by 206 per cent. And huffing and puffing hard to playing catch-up is diesel, which has won this battle, notching up a revenue growth of 377 per cent. Not to be left out, LPG (liquefied petroleum gas) has seen prices increase from Rs 594 in December 2020 to Rs 813 now. Ironically, this is happening at a time when crude oil is way below its historical high of nearly $150 per barrel.

So oil is cheap still?

Yes, if we talk crude oil. No, if we talk edible oil. And that is a direct reflection on the state of matters today on fuel prices. We have messed with one, and it is now messing with the others; many, many others. It had to happen; inflation is soaring. Mustard oil, and I shall not talk brand names, is up almost 100 per cent in the last one year alone. Refined oil is keeping pace, as are the rest of the things we eat, a typical domino effect. We may stop going to clubs, five-star hotels and eateries, but we still have to eat.

And so we eat. At prices most cannot afford. We see imbecilic videos on social media of people all but chastising and castrating themselves, screaming "petrol mehanga ho gaya" (petrol is getting expensive). It is a good way to pass time, and it is good that there are idiots bigger than me out there, most of them politically-motivated. But it is a wake-up call too. Where shall this take us tomorrow; as a family, a colony, a city, a state and a nation?

I am talking the bigger picture. Thankfully, that's one thing I am not responsible for. I am not capable of it and don't want to be either. What I do want and need is that the people who manage my country and my future vest their interest in us and me, as much as we vested our trust in them. Otherwise, it shall continue to be a tumultuous turnout – what came first, the cat, the mouse, the chicken or the egg?

Do we still need Don Quixotes?

The writer is a communications consultant and a clinical analyst. narayanrajeev2006@gmail.com. Views expressed are personal

Next Story
Share it