International crude prices are on an upswing in the last few weeks. Brent crude shot through the psychological $75 per barrel mark last week and is now ruling at the highest levels of the past three years. The price has, in fact, trebled in three years. The prices of petrol, diesel and other petroleum products in India have also risen accordingly. But they did not fall when the prices fell in the international market because the governments did not want to reduce the taxes and levies imposed on the petroleum products. After the dismantling of the administrative price mechanism, government-owned fuel retailing companies have been revising prices on a daily basis to reflect the changes in the international prices. But suddenly the prices were frozen on April 24, and neither the government nor the companies gave a convincing reason for that. 

The only plausible reason for the freezing of prices was the Karnataka Assembly elections. The central government probably did not want the prices to keep rising every day when the BJP was fighting a tough election battle in the state. The prices had hit record levels last month and there were nationwide protests and demands to cut them by reducing the taxes which the central and state governments were collecting on petroleum products. The demands did not evoke any response. But suddenly, there was a moratorium, and the oil marketing companies (OMCs) could only have been instructed by the central government to effect a freeze. The government said that it did not tell the OMCs to hold the prices. But this cannot be true. Why should the companies go against the established policy, stop the daily increase in prices, take a hit and suffer the pain and see their prices fall in the stock market for no reason? The fact that the prices were hiked after the Karnataka elections confirm that the freeze was prompted only by poll-related considerations.

This was an unfair attempt to influence the choice of the voters through the exercise of a power that rests in the government. It should, therefore, have been considered a violation of the model code of conduct, and the Election Commission should have taken note of it. The prices of petrol, diesel and LPG had been frozen for some weeks before last year’s Gujarat Assembly elections, also. This is wrong and gives an unfair advantage to the ruling party at the Centre in the elections. Such actions also undermine the credibility of national policies. Well-considered policies which evolved over the years should not be violated for narrow political reasons.