High petrol & diesel prices: Union Ministers run out of excuses

Infrastructure expenses, welfare expenses, free vaccine were some of the grounds cited for the high prices. But the alibis are falling flat as international crude prices threaten to rise higher

Price hike on Petrol and diesel
Price hike on Petrol and diesel
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Sanjukta Basu

In the Prime Minister’s constituency of Varanasi, petrol on Thursday was priced at Rs 105 per litre and diesel at Rs 97. In the last one-year petrol prices in Varanasi have increased by 28.86% and diesel by 36. 97%. On the same day petrol was being sold at Rs 113 and diesel at Rs 104.88 a litre.

But the Government remains unperturbed. In fact, both BJP leaders as well as ministers at the Centre and in the states have justified high prices to rising petroleum prices in the international market and to the urgency to raise revenue for welfare schemes. One of the favourite alibis of the Government is to say that taxes on petroleum products have paid for free vaccines.

But if that were indeed true, why have a large number of Indians paid Rs 800-Rs 1,200 for each dose of vaccine? What happened to the PM CARES fund and if taxes paid for the vaccines, why did the Government and the PM celebrate ‘100 Crore FREE vaccine’ as if people have not paid for them? Political hypocrisy, dishonesty or opportunism?

Following reports this week that India was seeking help from international agencies like the International Monetary Fund for ‘vaccine procurement’, former union minister and Rajya Sabha member Jairam Ramesh tweeted on Thursday, “Govt of India seeks loans from international institutions to finance vaccine procurement. But what about the argument trotted out by BJP that petrol, diesel & LPG prices have been, and are being raised to fund vaccination?”

Union ministers have been arguing for months that the high prices of fuel were paying for ‘free ration’ and ‘free vaccine’. While a large number of Indians paid for their vaccine, the Union Government’s budget for vaccines, originally pegged at Rs 36 thousand Crore, is unlikely to exceed Rs 66,000 Crore even after it decides to vaccinate everyone below the age of 18. But the Government has collected more than 30 times that amount by way of taxes on petroleum products.

BJP leader and Uttar Pradesh Sports minister Upendra Tiwari claimed last week that 95% of Indians did not use petrol. Very few Indians can afford cars and are not bothered about petrol or diesel prices. In any case, the per capita income of Indians, he declared, had doubled since 2014.

The BJP president in Assam, Bhabesh Kalita, was equally insensitive when he dismissed suggestions that people were being forced by high fuel prices to ride with three or more people on motorcycles. ‘Tripling will be allowed only when petrol prices go up to Rs 200 per litre,’ he asserted.

Madhya Pradesh energy minister Pradhuman Singh Tomar had advised Indians to walk and use the bicycle more often. Reminding Indians of the health benefits of walking, Tomar asked whether people rode bikes to buy vegetables. “What is more important for us - petrol and diesel or people’s health and the country’s health services? If you look at my diary for the last 30 days, you will come to know how much I travel in car, how much I cycle and how much I walk,” the minister said.


The Union Petroleum Minister Hardeep Singh Puri was quoted as saying in the media that the country had administered one billion doses of the vaccine, fed 90 crore people for one full year during the pandemic “providing 3 meals a day” and supplied free cooking gas refill to 8 crore poor beneficiaries. “All this and much more with that Rs. 32 a litre excise duty (levied by the Central government).” The minister said, adding that money collected from taxes also went into building roads, constructing houses for the poor and other social welfare schemes. The minister of state Rameshwar Teli also joined the chorus and said, ‘blame it on free vaccine’. Teli has also claimed that price of packaged mineral water is higher than petrol.

BJP leaders have repeatedly justified the high prices of fuel by arguing that people used buses and only politicians were complaining about it. People would eventually get used to the high prices of petrol and diesel, they have said confidently.

In a rare moment of introspection, Dharmendra Pradhan, former Union Minister of Petroleum and Natural Gas said, “I accept that fuel prices are pinching consumers, there’s no doubt about this. But over Rs 35,000 crore have been spent on Covid vaccines in a year. Rs 1 lakh crore has been spent on Pradhan Mantri Gareeb Kalyan Yojana in order to provide eight months’ ration to the poor. A few thousand crores of rupees have also been transferred to farmers’ bank accounts under PM Kisan…In such dire times, we’re saving money to spend on welfare schemes.”

Finance Minister Nirmala Sitharaman and Amit Malviya, who heads BJP’s IT Cell, blame the UPA Government for the fuel price hike. “The increased prices of petrol and diesel is a legacy of UPA’s mismanagement. We are paying for the oil bonds that will come up for redemption starting FY2021 till 26, which were issued by UPA to oil companies for not increasing retail prices then,” Malviya tweeted in June 2021.

While the UPA issued oil bonds worth Rs 1.34 lakh Crore, the interest on oil bonds paid in the last seven years by the Modi Government has totalled Rs 70,195.72 crore. But of the Rs 1.34 lakh crore worth of oil bonds, only Rs 3,500 crore of the principal amount has been paid back in the last seven years, calling the finance minister and Amit Malviya’s bluff.

The Centre’s revenue from taxes on crude oil and petroleum products jumped in 2020-21 to Rs 4.18 lakh crore. Excise duty on petroleum products jumped to Rs 3.45 lakh crore in 2020- 21, according to government data.

The Centre’s share in taxes on petroleum products has progressively increased from Rs 2.73 lakh crore in 2016-17 to Rs 2.87 lakh crore in 2019-20. On the other hand, the share of states in taxes on crude oil and petroleum products declined to Rs 2.17 lakh crore in 2020- 21 from Rs 2.20 lakh crore in 2019-20.

So, there. What will be the next excuse?

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