People's Democracy

HIKE IN PETRO PRICES

Shameless Falsehood,

Limitless Hypocrisy

 

Shyamal Chakraborty

 

THE Empowered Group of Ministers (EGoM) decided in its meeting on June 25 to increase the prices of petrol, diesel, kerosene and cooking gas. In fact, the decision had been taken earlier but its announcement had been kept in abeyance. The meeting of the EGoM was clearly an exercise in match-fixing. Its conclusion was pre-determined. It was arranged beforehand that minister so-and-so would not attend the meeting and later pose to be angry with the decision in public. It was a totally pre-settled affair. Partners of UPA-II are all fruits of the same tree. A poison-tree that can only yield toxic fruits!

 

The government's decision of hiking the prices of petro products – petrol by Rs 3.50 per litre, diesel by Rs 2 per litre, gas cylinder by Rs 35 and kerosene by Rs 3 –  will automatically lead to a rise in transport fares. Bus, taxi, auto-rickshaw fares are all set to go up. Naturally, the whole of transport sector will be badly affected. People depending on public transport will suffer due to the hike. And the decontrolling formula adopted by the empowered group of ministers will make their suffering perpetual! But this is only the direct impact. There is more.

 

The indirect impact of price hike is not always noticeable. It spreads its roots deeper. Invisibly, insidiously, like cancer. Almost every wholesale essential commodity is transported by truck, van or matador. As the fuel price rises, the transportation cost will be higher. The prices of commodities will naturally shoot upwards. The cascading effect of this hike in fuel prices is bound to make life even harder for the people who are already beleaguered by the sharp rise in commodity prices, especially that of grain and other food products. Our scientists have made us proud by firing rockets into space. Our Congress-led government has decided to tie the prices of things of daily use to that rocket so that they shoot up higher and higher than ever!

 

It is common knowledge that 77 per cent of the population (according to the  report of the National Commission for Enterprises in the Unorganised Sector ), spend 60-80 per cent of their meagre Rs 600 monthly income on food. The increase in prices with no concomitant increase in salary will obviously bring in a curtailment in their food consumption. The result will be either falling prey to malnutrition and/or ill health or taking recourse to begging and/or lumpenisation just for the sake of survival.

 

The burden of the rise in LPG price will fall on the middle class and lower middle class households and women evidently have to bear the brunt. The already hard-hit homemakers would logically have to carve out the extra sum by limiting the daily consumption of other food items. In the rural areas, LPG is an unthinkable luxury to poverty-stricken families. Coal price is getting out of reach. Firewood is scarce. The availability of kerosene at controlled rates was the only solace left to them. With the latest decision to raise kerosene price by Rs 3/litre and progressive decontrolling of petro-products, that comfort has also evaporated into nothingness.

It is quite natural that people will hit the streets to protest, to raise their voices against the hike in prices of petroleum products. The people are seething; the people are fuming. They want withdrawal of price-hike; they demand a rollback immediately. The transport strike in Bengal and the general strikes in Kerala and Tripura have given them capacity to stand up against this tyrannical decision. But that is not all.

 

FALSEHOOD -1

The government’s basic logic is apparently quite simple. The price of crude oil has gone up in the international market. So the rise in oil price in our domestic market is absolutely justified. Watertight argument, one might say! But let us examine the case a bit closely. Crude oil is currently selling at $70 per barrel in international market. After refining the crude, the production cost for petrol in our domestic market comes to Rs 23.02 per litre! Though it appears astonishing, you shouldn’t be surprised to hear this. The information has come directly from our minister-in-charge in the Parliament. This was the figure he mentioned in March 2010.  Of course, you have the right to know what makes the same petrol cost Rs. 47.43 for us at the retail pump station! You may probe how the Congress-TMC-DMK combine manages to rework the oil price from Rs 23.02 to Rs 47.43. Elementary arithmetic, my dear reader! The central government extracts a customs duty of Rs 1.73 and imposes an excise duty of Rs 14.78. That makes the tax component add up to Rs 16.51. This is Manmohanji’s humble demand per litre of petrol. So the statement that the hike in oil price is due to the price rise internationally is a light-year away from truth! In fact it is a classic example of a half-truth. And we all know that a half-truth is more perilous than a lie. So let’s face these blatant examples of falsehood squarely.

 

FALSEHOOD-2

Another logic that is being put forward is that the oil marketing PSUs are running out of money and are incurring losses arising from under recoveries of petroleum products. Indeed, if the oil companies face a financial crunch, how can they be expected to supply oil at affordable price? Quite logical, you must agree. But would the so-called loss have occurred if the money (Rs  16.5 per litre) taken out by the central government was directly handed over to the PSUs? The answer is, of course, negative. The finance minister in his last budget speech this year informed the House that he has collected an amount of Rs 56,365 crore from increased prices of petroleum products. Has he given this amount to the oil companies? The full amount? Oh no! He could only spare Rs 14,058 crore for them. The rest, that is, Rs 42,307 crore was entirely digested by his ministry. Now he is talking of losses! Well, Herr Goebbels did leave his apostles behind!

 

FALSEHOOD-3

As if to add insult to injury, the government has been imposing a cess on oil for the last three decades or so, adding to the consumer’s burden. This has been in vogue from the heydays of the late Prime Minister Indira Gandhi, that is, right from 1974. The declared objective was seemingly quite grand! The people are being harassed by frequent ups and downs (though it never went down in practice!) of fuel prices, she lamented. She introduced a fixed cess to get rid of the daily trouble once and for all!

That cess has gone up by leaps and bounds in the last decade. In 2001 it was Rs 900 per tonne. In 2006 it rose to Rs 2500 per tonne. Now Rangarajan Committee has recommended a cess of Rs 4800 per tonne. One wonders what would happen if the cess is hiked to that extent! In case of a venomous snakebite, the usual procedure is to tie a ‘tourniquet’ tightly around the wound to block blood circulation. But there is a saying in Bengali that goes like this: for a head bite there is no way you can bind the tourniquet!

 

FALSEHOOD-4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           During this year's budget session of Parliament, the government, announced a hike in the prices of petrol and diesel. Petrol price was increased by Rs 2.71 a litre and diesel by Rs 2.55 per litre. Then again, prices of petrol and diesel increased by Rs 0.50 and Rs 0.26 a litre, respectively, from April 1 in 13 big cities in the name of switch-over to cleaner Euro-IV grade fuel. This is the third hike. Now, applying unitary method, we may ask: if the petro-price is increased thrice in 5 months how much more will it be increased in 12 months? Or one may ask: if the price of petrol has been increased by Rs 5.97 in 5 months what will be the price of petrol at the end of 12 months?

 

It is common knowledge that global oil business is no longer controlled by oil companies. The centre of decision-making has shifted to New York and London. The 32 major oil companies are up in arms against USA and the MNCs. Much of today’s crude oil price is pure speculation driven by four major oil-trading banks, namely, Goldman Sachs, Morgan Stanley, Citi Group and J P Morgan Chase. The oil companies allege that these four trading giants manipulated the rise in oil price last year from $70 to $140. They are being patronised and supported by the US government to ‘run’ their business. If the oil price shoots up to $140, a neat sum of $100 goes into their pockets. The more hoarding, the more is the profit. In 2006, the oil stock contained 35 crore barrels. Now it has gone up to 70 crore barrels. The current price is around $70 per barrel. No one knows what will happen in the days to come, thanks to the miracles of these speculation lords. If there is the slightest hike in the global market, our great global FM Pranab Mukherjee who enjoys the blessings of our honourable global PM Manmohan Singh will rush to raise prices in the domestic market. In this way they can serve US interests and the purpose of the Speculation Babas overseas the best. So, long live the Speculation Babas!

 

FALSEHOOD-5

Sometimes the defenders of UPA-II government level a petty charge against the state governments. They allege that the VAT levied by the respective state governments is mainly responsible for the excessive price of oil in the domestic market. Let us investigate how far that is true. Below is the comprehensive chart of sale tax/VAT levied by some major Indian states on petrol. The chart is by all means, self-explanatory!

 

Name of state	Sale tax/VAT in % on petrol	Amount in rupees
Andhra Pradesh	33	7.59
Kerala	29.3	6.74
Maharasthra	28.7	6.60
Madhya Pradesh	28.75	6.61
Rajasthan	29.39	6.76
Tamil Nadu	30	6.90
West Bengal	27.71	6.37

 

We could have added the data from other states as well. But we thought it redundant, as these are the highest figures. So, it is now crystal-clear that the state share in prices varies from Rs 6.37 to Rs 7.59 while the centre takes away a hefty sum of Rs 16.81. So we don’t need to be mathematicians to know that the protectors of UPA-II government are miserable deceivers!

 

ARE THE STATES

REALLY TO BLAME?

The central government is advising the states to reduce their taxes to provide some relief to the people. What a strange piece of advice! They will go on hiking prices and ask the states to forsake their share of taxes! As we all know, the financial powers of the states are very limited. All the money in the central treasury comes from the states. But the states are given a poor share of the accumulated sum. We had demanded that the states should be given 50 per cent of the whole collected from the states as each of them is under severe fiscal strain. But, as usual our appeal fell on deaf ears. All they could spare was a meager 32 per cent. Often finance ministers from states are found knocking at the doors of power in Delhi with begging bowls. Ironically it is their money that they are seeking. And the centre behaves as if it is giving dole to the poor famished state!  Give us the 50 per cent, we say. We will take care of ourselves. We say, let charity begin at home! Bring down your share from the hefty Rs 16.81, will you?

 

We also know that the petrol price is a little lower in Delhi. Why shouldn’t it be so? After all, Delhi is the city of cities. It houses the Parliament. So the Centre is quite liberal in its largesse to Delhi.

 

TO GLOBAL MARKET

WITH LOCAL WAGES

The apologists of market economy are in ecstasy. The decision of decontrolling petroleum prices has made their cup of pure joy full to the very brim. Now, Indian price is at par with the international rate.  How blissful! But as eternal spoilsports, we dare to ask these super-scholars a simple question! How come that the commodities of our daily necessity are to be sold in our market at international rates while we will be paid typically Indian wages? We all know that the new international poverty line has been fixed by World Bank at $1.25 a day at 2005 prices. The UN wants it to be $2. That is roughly Rs 90-100. Compare this with the Indian scenario! The Congress-TMC-DMK coalition has fixed poverty line at Rs 18 for the urban sector and Rs 12 for the rural areas. A truly globalised proposition, one may say!

 

 

In my childhood I came across lines from a poem by poet Biharilal Chakraborty which read: “Here I’m and here I’m not/ Why am I and why am I not?” I bore these strange lines in my heart. The recent frolics of the Trinamul Congress supremo have brought back these lines to my memory. She was in Delhi but she was not in the meeting of the empowered group of which she was a member. A clear case of pre-determined absence with the intention to create an impression that she is unwilling! Everyone in UPA knew what she was going to do next. She was to hiss and not to bite! Of course she was to do all this not in the meeting but outside, in front of cameras and boom microphones. She had worked exactly according to her game plan. Just in the way she did when the issue of disinvestment of PSUs came up in the cabinet. A repeat performance, so to say! But does she really think the common people are such fools that they are to be deceived so easily!

 

 

THE FINAL CALL

The government has done its job. They have declared the price hike. Now it’s time for the people to act, to protest, to resist, to fight back. History teaches us to strike back against every anti-people mode of onslaught. If we fail autocracy will triumph. We cannot let that happen. We are ready.