There was a time when a rise in petrol and diesel prices would send people into a paroxysm of outrage and self-righteous indignation. Truckers would go on strike to protest the rising prices of diesel and other organisations would demand a rollback in petrol fuel hikes. Now, however, we are so consumed by the theatrics, vandalism, arson and looting by people ‘offended’ by a movie, that we have failed to take note of a fact that has a far greater bearing on our daily lives than some highly politicized mythical and misguided notion of caste honour.
India has the most expensive fuel in the region. Though the data in the image is from a few months ago, it is relevant in showing how costly petrol and diesel are in India as compared to our neighbours. And note; the price shown reflects prices in Delhi, where petrol is much cheaper than many other parts of the country.
The way that fuel pricing functions now, fuel prices change every day. For the past several weeks, the prices have continued to rise at a few paise a day. Today the prices of diesel are at a record high. The price of petrol is the highest it has ever been since 2014.
Petrol prices all over the country hover in the region of about Rs 72 to 76 a litre. In India’s financial capital Mumbai, the price has crossed Rs 80 a litre. Diesel is at an all-time high – costing upward of Rs 68 in Andhra Pradesh and Kerala.
Many point to the fact that Indians have paid about this amount for petrol previously as well. However, it is worth pointing out that previously when petrol was very expensive in India, this is because the prices of crude oil were very high globally. Indian companies were finding it expensive and difficult to source crude at the time. Crude oil prices fell by over 50% between May 2014 and September 2017. However, petrol and diesel prices did not fall at the same rate during this period.
In June 2014, crude oil was a $109 per barrel. The prices fell by 74% to a low of $28.1 per barrel in January 2016. In spite of this, petrol prices for you and me fell only by about 20%. The steep rise in excise levied by the central government petrol is one reason for this. Plus, we pay VAT or sales tax which is levied by state governments; the rates of which have also risen over the past few years.
Recently global crude prices have risen and so has what we pay at the pump. However, it is worth remembering that about 40 to 50% of what we pay at the pump is by way of government levied taxes. So while we paid high rates when crude was very expensive, we continue to pay high rates today as well; this time because of high tax components.
A question begs to be asked – is our attention being diverted by permitting goons to run amok burning malls and vehicles and attacking innocent school kids on the mere pretext of a movie so that we don’t start talking about the real issues? The issues that that really should pinch?
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