In a continuing attack on the people – peasants, workers, consumers, traders and generally poor people, the Govt of India has now continuously raised petrol and diesel prices for last 16 days. Petrol prices have been hiked by Rs 8.30 per litre while diesel prices have been increased by Rs 9.50 per litre. This increase is on top of sharp increase in prices of diesel and petrol made in the month of May by increase in duties.

With economy in doldrums and need to take measures to spur economy assuming paramount importance, economists and people’s organizations have been demanding lowering of prices of petrol and diesel. The Govt.’s increase in taxes at this time is thus assumes a criminal character besides being irresponsible in the extreme.

This increase has come at a time when crude oil prices continue to be low in the international market despite some marginal increase in crude oil prices in May 2020. The earlier sharp decline was offset by increase in duties. Even this rise of approximately 9 dollars per barrel works out to just Rs 4.30 paisa per litre, which is half the value of the current hike in prices. In fact the component of taxes in the prices of diesel and petrol now amount to roughly two thirds of the price charged from the people.  In fact the cost price of crude is only about Rs 20.12 per litre. After processing, transport and Oil company profit margins, ‘ready to sell’ petrol is priced at Rs 24.62 and diesel is at Rs 26.02 per litre. Excise duties currently are Rs 32.98 and Rs 31.83, while VAT is Rs 18.36 and Rs 18.45 per litre of petrol and diesel respectively. With this, Rs 51.32 paisa is govt taxation. It is 65% of the value paid by the consumer.

With economy in deep crisis and industrial production having fallen by 55% in April, preceded by a 16.7% dip in March, the entire economy is in shambles despite an increase in agricultural output during Kharif season. Having failed to make any worthwhile contribution to prop up peoples’ income in its relief package, the GOI has left them, particularly the peasants, industrial workers, small traders and small producers to their own effort to survive.  Raising fuel prices at this juncture will severely and adversely impact all industrial and agricultural operations, it will raise travel and transport costs and fuel all round inflation. It will undermine people’s own effort to survive and is a serious attack by the Modi govt on ‘atmanirbharta’.

Earlier while the crude oil rates fell drastically during rise in Corona cases world over, the govt took advantage and raised the excise duty on petrol and diesel by Rs 3 per litre. Then during the lockdown, it amended the finance bill to increase the maximum limit of raising additional excise duty on petrol from Rs 10 to Rs 18 per litre and on diesel from 4 to Rs 12 per litre. Now with some increase in the crude oil prices, these increased taxes and crude hike are together further fuelling the fuel price hike.The govt excise duty on petrol has been raised from Rs 9.20 per litre in November 2014 to Rs 31.98 in June 2020 while that on diesel has been raised from Rs 3.46 to Rs 31.83.

Meanwhile the govt had then reduced the ATF prices to Rs 22.54 per litre while increasing the burden on the poor.  Today also it is Rs 33 per litre, which is just 41% of that of the poor man’s fuel. This highlights whose travel and transport the govt wants to subsidize and who the govt wishes to burden.

Central Committee of CPI(ML)-New Democracy strongly condemns this increase in prices and demands that taxes on diesel and petrol should be completely waived off. This is all the more urgent in view of the needs of economy and people’s livelihoods which have been further severely impacted due to Govt. handling of Corona pandemic.

CPI(ML)-New Democracy

June 23, 2020