India depends on imports for meeting its petroleum product needs to the extent of 80 per cent. With global oil producers limiting production, with Iran, a large producer facing US sanctions, prices of crude oil and hence of petroproducts, have been registering increases and these impact domestic prices. There has also been a steep fall in the value of the rupee related to the US dollar and international prices of most of the commodities and other services are designated in US dollar.
It is true that the Centre and the states have been making increasing gains on the rise in the cost of crude. With mounting criticism, a few states – Rajasthan, Andhra Pradesh, West Bengal, and Karnataka – have announced token reductions.
Governments have a reason
The reluctance of the governments should be viewed in the context of their heavy dependence on the taxes on fuel in collecting revenues. These are estimated around Rs 300,000 crore for the Centre and around Rs 200,000 crore for the states. With the compulsions to keep fiscal deficits under control and with limited leeway available for expanding resources, governments are in a straitjacket. Remember, both the Centre and the states have been continuously engaged in introducing various welfare measures designed to benefit the larger sections of the population; like the recent Ayushman Bharat health insurance scheme launched by the Centre to help 50 crore population with health cover of Rs 5 lakh each.
Petrol is not consumed by the poor and goes for the consumption of powering cars and scooters. Understandably, these are afforded by better of middle-class citizens. This section has been silently accepting steep rises in prices of a variety of products and services. Look, for instance, at the massive increase in prices of construction materials: over the past five years in Chennai, the price of cement has shot up from around Rs 260 per bag to around Rs 400 plus per bag. There is not even a whimper of protest. From band-aid to a vast range of drugs and pharma products, both sold over the counter and prescribed, prices have increased manifold; there is an added burden: for years, tablets were available in small numbers of even one or two; today the consumer is often forced to buy a full strip of 20 or more, even if the patient may not need these. Not to talk of the humongous increase in health costs. Even a simple surgery costs over Rs 50,000. No objection. Sugar prices doubled in a matter of months. Jaggery, a low-tech product, is priced 50 per cent higher than the cost of a manufactured product like sugar. Any questions? One comes across a vast range of products used by the middle class like dresses registering huge increase in prices. There have been no protests. In the pre-liberalisation days it was possible to attend to a dent in your two-wheeler or car, including painting, for Rs 100 – Rs 200. Today you cannot come out of the garage without paying a few thousand rupees for any repair. Do we complain?
