People's Democracy

Dipankar Mukherjee

THE NDA government which excels in the art of deceit and deception has done it again. Within a couple of weeks after the budget session of the parliament it has raised the price of petrol and diesel on the oft-repeated plea of increase in international crude price. It is the same government which had imposed cess of Re 1 per litre on diesel in February 1999 as it felt that "international and domestic price of crude oil and petrolelum products are unusually soft." If the then crude price of 12 dollars a barrel warranted an administration cess of Rs 1 per litre. Why the same should not be immediately withdrawn when the current price is 25 dollars per barrel, that too when Administrative Pricing Mechanism (APM) is removed?

If APM is removed and the international crude oil price is the only guiding factor for pricing, has the government any right to charge Rs 1800 per ton as cess under Oil Industry Development (OID) Act 1974 on indigenously produced oil by companies like ONGC and OIL. Such cess has no place in government’s own professed doctrine of market-determined prices. Has the market directed the finance minister to raise the cess from Rs 900 per ton to Rs 1800/ per ton in this year's budget. Interestingly of the Rs 36,000 crore collected so far as the cess, not a single paisa has been spent by the government during these years in oil sector. Where has this money gone? Would the government clarify?

As a matter of fact higher international crude price is a good revenue-earner for the government. Duties on oil imports are purely revenue collections for the government and the price has to be borne by the consumers. Vajpayee government, true to its double-speak character, talks about the UF government's decision to dismantle APM in 1997 but forgets to implement UF government’s decision to reduce import duty on crude oil to between 0 to 5 per cent by 2002. Is this government prepared to reduce the import duty to this level instead of doing cosmetic exercise on excise duty? It can’t and it won’t. The reality is that during the present regime the estimated contribution of oil sector to the central exchequer, through duties, taxes, cess, etc has doubled to more than Rs 50,000 crore from Rs 26, 476 crore in 1997-98. Add to it, the price hike of petroleum products during last 4 years - kerosene from Rs 2.56 litre to Rs 11 per litre, LPG from Rs 136 per cylinder to Rs 244 per cylinder, diesel from Rs 10 per litre in 1998 to Rs 18 per litre and petrol from Rs 22 per litre to Rs 29 per litre approximtely. No government since independence had declared such undeclared, or should we say 'proxy' economic war against the peasants, workers and the common man through such huge petro price hike.

OPEN CHALLENGE

Here is an open challenge. Let the government bring out the cost-sheet of petroleum products, starting from the crude oil price to the marketed price of the products. Even at the present crude price of 25 dollars a barrel - which means Rs 8.50 to Rs 9 per litre, the present prices can not be justified under any pretext. The government can not be allowed to get away with this daylight robbery.