Ultimately, the Manmohan Singh Government decided in favour of a massive hike in petrol prices in the wake of a major hike in crude oil prices in the international market. After a hike of Rs. 2.50 per litre in petrol and Rs. 2 in diesel, petrol now sells in Delhi at Rs. 40.49 and diesel at Rs. 28.45 per litre. The Government’s logic is simple: since crude oil prices have crossed the mark of 50$ per barrel in the international market, domestic petroleum companies will have to suffer heavy losses unless prices are hiked here. So, the Government says it has, reluctantly, had to hike the prices, ensuring however that the hike is as minimal as possible, and that the prices of kerosene and cooking gas have been kept constant so as not to burden the common people.
Now, there is no doubt that there has been a continuous trend of steep rise in crude oil prices in the international market, and because we import more than 70% of our needs, a pressure was being mounted for a hike in the domestic market. But this is only an excuse. The fact of the matter is that the real cause of the recent hike in petro-prices is the increase in excise duty of the petro-products in this year’s budget. Of the Rs. 2.50 per litre hike in petro-prices, excise duty accounts for Rs. 2.20, while 30 paise is under the head of quality enhancement. Similarly, of the Rs. 2 per litre hike in diesel prices, Rs. 1.06 accounts for the increased excise duty, 24 paise is towards quality enhancement, and 70 paise to compensate the hike in international markets. Clearly, the hike in petrol prices has not much to do with the international prices.
That is not all; the share of taxes/duties has reached the level of 57% to 35% of the prices of petrol and diesel respectively. For instance, in Delhi , the share of customs duty, excise duty and sales tax is Rs. 22.98 out of Rs. 40.49 per litre for petroleum and Rs. 9.92 out of Rs. 28.45 for diesel. No doubt, the State and Central Governments take the petro-products to be a goose that lays golden eggs. For the Government, hiked prices means more taxes for the Govt. exchequer.
But for the common man, it is a double assault. He has to shoulder the burden of increased taxation as well as that of increased prices in petro-products. But the Congress-led UPA, for all its tall claims of being ‘With the Common Man’, is unwilling to change this convenient arrangement.
More importantly, the Manmohan Singh Government has deliberately shut its eyes to the real reasons responsible for the hike in the crude oil prices in the international market. In fact, this trend of spiralling hikes has come to stay after the Iraq war. Until US intervention in West Asia and Iraq ends, there is no hope of a decline in petro-prices. Having effectively tied itself to US foreign policy, the UPA Government is not in a position to take any initiative in this regard. In fact, under pressure from the US , Manmohan Singh on his US visit, even expressed doubts about the India-Pakistan-Iran gas pipeline, which would have helped India attain energy security.
Another important inter-related factor is the deliberate dismantling of public transport systems in favour of private transport and liberalisation. This has benefited the domestic as well as foreign automobile manufacturers, but has resulted in a massive increase in the consumption of petro-products. Hundreds of millions of dollars are being spent every year on importing petro-products. Ultimately its burden is being borne by the common man. Effective public transport would result in fewer private cars, curbing the consumption of petro-products - but this too is a policy the Government is not ready to follow.
CPI(ML) held a nationwide ‘Protest Week’ from June21-28 against the hike in fuel prices. In Delhi , the effigy of Manmohan Singh was burnt at Parliament Street on June 24. In Bihar , protests were held in almost all the districts at various levels throughout the week, culminating in a Chakka Jam on June 28, which was very successful in most districts. In Patna , party activists blockaded the Dak Bangla Chowk. In Orissa, a road blockade was organized at three places in Gunupur district on June 24. In Rajasthan, protests were held at various centers including the State capital Jaipur. In Jharkhand, protest marches and effigy burnings were held at various districts and blocks. In Ranchi , a demonstration was held on June 21. In UP, protests were held at Lucknow as well as Ghazipur, Varanasi and other centers.
In Assam , CPI(ML) held a dharna at Guwahati on 24 June and held a procession on the streets of the capital. A joint protest programme with other Left parties was held on 28 June. In Tamil Nadu, street corner meetings were held on June 25 in Chennai and a demonstration was held at Tirunelveli. In Kakinada district of Andhra Pradesh a protest was held on June 28.