Herald View: Petroleum Minister Dharmendra Pradhan seems as clueless as the Health Minister or is he ?

Having denied the Indian consumers benefits of the global crash in oil prices, the Government maintains fuel prices, which stabilise before elections, at high levels with UP in mind

Price hike on Petrol and diesel
Price hike on Petrol and diesel
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Herald View

Union Petroleum Minister Dharmendra Pradhan appears as clueless about fuel prices as the Union Health Minister is about vaccination. Mr. Pradhan had boasted in February that fuel prices would stabilize soon. International prices of crude, he had asserted confidently, would soon fall because oil producing countries were about to raise output. He did not take into account the possibility that demand too would grow and oil producing countries would want to cut their losses. He went a step further in April and declared that fuel prices would soon decline. We all know what happened next.

Prices of petrol and diesel breached the Rupees 100-mark for the first time this month in several states but Mr. Pradhan remains as brazen as before. In February his explanation was that additional revenue was required to spend on infrastructure. In June his explanation is that additional revenue is required for Covid relief. The minister has valiantly tried to defend a policy over which he clearly has no control. But while poor Mr. Pradhan ties himself in knots, the one man who can explain has not spoken a word. The Prime Minister, who alone is driving the policy, seems oblivious to the repercussions on the economy and the people. The road transport sector, already reeling because of the pandemic and the lockdown, is bearing the brunt of rising prices and not surprisingly, passing on the cost to the people.

Inflation, both Wholesale Price Index and retail inflation measured by Consumer Price Index, have exceeded the comfort level set by the RBI. But the Government for strange but unexplained reasons is reluctant to raise revenue by taxing the wealthy and corporate bodies although they have registered record profits during the pandemic. Narendra Modi, who as CM of Gujarat would miss no opportunity to blame the UPA government for fuel price hikes, has now strangely lost his voice. It is also ironical that while the UPA Government had to grapple with international prices hovering over 100 US Dollars a barrel, the Modi Government keeps blaming international prices, which have been lower than in UPA years, plunging to 26 US Dollars and hovering now around 70 US Dollars. India has a high storage capacity and is actually an exporter of refined petroleum.


China and several other countries took advantage of low prices last year, bought as much as they could and ramped up storage. India seems to have missed the bus. Taxes on petroleum remains the highest in India at 70%, a disproportionate amount going to the Union Government and not the states as Mr. Pradhan would like people to believe. Never before have prices of petrol and diesel been so interlinked with politics. There is no other explanation when fuel prices magically stabilize before and during every state or national election. Prices then register a sharp increase immediately after the election results are declared. This year too petroleum prices remained away from the headlines till May 2, when results of the five state elections were declared. Since then, fuel prices in India have been hiked more than 22 times. With economies in Europe and the United States reviving after the pandemic, demand for fuel and international prices of crude are almost certain to go up. In fact, the prices are expected to regain the level of 100 US Dollars this year. But since politics is behind everything that this government does, it is entirely likely that fuel prices will be dramatically reduced before the Uttar Pradesh election early in 2022. So much for good governance and optics.

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