Congress says fuel price cut meagre, accuses govt of 'Rs 13 trn fuel loot'

Farmers, BJP rank and file compelled the govt to cut fuel prices ahead of polls

For nearly a month, union ministers had insisted there would be no cut in prices of petrol and diesel, but the Narendra Modi government on Thursday succumbed to the pressure built not just by the farmer protest, but to voices within the Bharatiya Janata Party (BJP).

The need for cutting central excise on petrol and diesel by Rs 2.5 per litre, and instructing all BJP governments also to cut their VAT (value added tax) on petrol and diesel by Rs 2.5 was felt in view of the forthcoming assembly polls. The Vasundhara Raje-led Rajasthan government had cut fuel prices by Rs 2.5 on the eve of the ‘Bharat bandh’ called by the Congress and other Opposition parties on September 10.

However, the central leadership had asked the party rank and file to explain to the people that fuel prices are steep because of crude oil prices heating up in the international market, but the rate of inflation has remained below 4 per cent during the Modi government’s tenure. It had asked them to spread the message of other welfare schemes of the Modi government, particularly its health insurance scheme.

But the party started receiving feedback that the argument had ceased to be convincing on the ground, particularly with farmers, who were having to pay more for hiring tractors for harvest. Party leaders in poll-bound Chhattisgarh and Madhya Pradesh had asked the party leadership to heed the feedback from the ground.

One of the demands of the farmers, thousands of whom had landed at Delhi’s doorstep on Wednesday, was for relief in diesel prices. BJP chief Amit Shah, who was in Rajasthan on Thursday, led the party in congratulating the PM and Finance Minister Arun Jaitley for showing “sensitivity” to the needs of the people by giving relief of Rs 5 per litre. But Shah also made a note of how the health insurance scheme is proving to be a boon for the poor.

The Congress described the reduction as "meagre". Congress chief spokesperson Randeep Surjewala said the government had evidently panicked at the prospect of losing the assembly polls. He accused the Modi government of a “Rs 13 trillion fuel loot” by imposing heavy excise duty on petrol and diesel in the last four years and the benefits of low international prices were not passed on to the people.

The Congress demanded fuel prices be brought to the 2014 level and that petrol and diesel be brought under the GST regime. It said the Modi government has increased central excise duty on 12 occasions, raising the central excise on petrol by 211 per cent and on diesel by 443 per cent.

Surjewala said that, on 16 May 2014, the price of crude oil was $107.09 per barrel and the present price of international crude is $86 per barrel, with the average crude price during 52 months of Modi government being $58 per barrel, nearly 45 per cent less than the UPA tenure. Still, the petrol/diesel prices continue to skyrocket at much higher levels during Modi government, he contended.

Surjewala said an RTI reply has revealed that Modi government is selling petrol to 15 foreign countries at just Rs 34 per litre and selling diesel to 29 foreign countries at Rs 37 per litre. He said states ruled by Congress and other opposition parties have already reduced taxes on fuel, while the Congress government in Punjab will do so soon.