'Modi govt denying people benefit of low oil prices'

Narendra Modi govt denying people benefit of low oil prices; no other nation doing so: M Veerappa Moily

When nations around the world have passed on the benefit of plunging oil prices to consumers, the Modi government has irrationally kept petrol and diesel prices at levels prevalent when crude prices had touched an all-time high of USD 107 few years back, former petroleum minister M Veerappa Moily said Tuesday.

In a press statement, Moily said petrol was priced at Rs 71.41 per litre and diesel at Rs 55.49 a litre when during the UPA-2 regime international oil prices touched an all-time high of USD 107.09 per barrel.

Currently, the cost of crude is USD 36.29, but diesel is priced at Rs 65.39 and petrol at Rs 71.26 in Delhi, he said.

This has been done by the government raising excise duty on petrol by Rs 13 a litre and on diesel by Rs 16 per litre in two months to take away the gains arising from oil prices dropping to a two-decade low.

"When all the economists of the world including India are canvassing for putting cash in the hands of the people, the present government is taking away the benefits which should have been passed on to them legitimately. This is quite an irrational decision," Moily said. "According to the data available, no other country is denying the benefit of reduction in crude prices to its people."

Excise duty on petrol was Rs 9.48 per litre when the Modi government took office in 2014 and that on diesel was Rs 3.56. At present, this incidence is Rs 32.98 a litre on petrol and Rs 31.83 on diesel - a result of successive duty hikes.

Moily said the Congress-led UPA II had taken a conscious decision to do away with the administered price regime and to fix the prices of diesel and petrol in accordance with the benchmark international price. "The idea was to pass the benefit/liability in accordance with the market trend. This is a sound principle of economics and also done in the interest of the consumers and the economy of the country."

"In the days of crisis in the economy, such as the onset of COVID-19, the government should have been more sensitive to the plight of the people and consumers as they are in great distress," he said.

The senior Congress leader said even now, it is not clear to people as to which welfare programmes the excess money, garnered through excise duty hikes, has been ploughed into.

"While the decision of the UPA was to reduce imports and go for indigenous production and make India self-sufficient in oil and gas by 2030, the present government has not invested in oil and gas exploration since 2014, to make India self-sufficient," he said.

The UPA, he said, took conscious decision to establish refineries and strategic storage facilities and particularly to utilise the strategic storage facilities at Padur in Udupi, Mangalore and Vishakapatnam, which have an underground storage capacity of 5.33 million tonnes.

"The present NDA government has not expanded these strategic storage facilities," he said. "Currently, the NDA government has started filling up these caverns which are just sufficient to store reserves of up to 10 to 11 days of emergency supplies while it is prudent to have reserves for at least 90 days."

"Even after 6 years there has been criminal neglect on the part of the present government either to put up new refineries or setup more strategic storage facilities in the public sectors or even in the private sector," he added.

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