Why Govt’s Sham Price Decontrol of Petroleum needs to be challenged in Court
It is high time the government’s decontrol of petroleum products is challenged in the court. The decontrol, which has its declared intention of leaving the prices to market forces rather than be regulated by government, has in effect meant full control for the government while the customers have no control of what they would be asked to dish out for their fuel the next day.
Any decontrol that still leaves the power of manipulation in the hands of the government cannot be considered decontrol and is, therefore, a deviation from the policy. It needs to be challenged legally. The government policy, which was avowedly taken in the interest of consumers and for easing the burden on the exchequer, defies all logic and sense of fairness. The arbitrary government policies have completely decoupled domestic prices from the market forces.
If decontrol was allowed to run its course, prices would go up when international crude prices increase and come down when crude costs less in the global crude market. But in practice, just the opposite has been happening in the country.
Thanks to the skewed approach of the government, the Indian consumers have never benefited from a crashing crude market, where buyers even demanded a premium for lifting the stock, while every small increase, mostly on the path to recovery rather than any price momentum, has been passed on to the consumers at an exaggerated rate.
The extent of injustice can be understood from the fact that domestic crude prices today, with daily increments for 11 consecutive days already, are at the same level that existed nearly two years ago, when crude prices were 90 dollars per barrel, while today a barrel of crude costs only about half of that. The huge gap is the result of manipulation by the government.
The unfortunate reality is that the government has been using decontrol as an exploitative tool to convert petroleum into a cash cow. The government considers every dip in crude prices as an opportunity to make more money, by increasing the excise duty so as to deny the benefit of lower crude prices to the end users.
Only last month the government increased excise duties by Rs 10 per litre on petrol and Rs 13 per litre on diesel to take advantage of the fall in international crude prices. The latest increase came on the back of hike in March, when an additional excise duty of Rs 3 per litre was charged on petrol and diesel.
Every excise duty increase is followed by the bravado that the retail sale prices will remain unchanged. It is gleefully hiding the fact that the big difference should have gone to the price that the consumers have to pay. But whenever international prices go up, even by fractions, the increase is passed on to the retail users on the plea that it is market forces at play.
And the government shows no sensitivity to the hardships of the people, who are already facing severe cash crunch on account of the prematurely announced lockdown. This is no surprise as the government has been insensitive to the problems its decisions force on the people. Control or decontrol, the government firmly believes that it has the mandate, given by the people, to do whatever it thinks fit.
The Modi government is having a field day when it comes to adoption and implementation of policies that heap misery on the people because they face virtually no opposition. The opposition parties have completely failed in articulating the disappointment of the people.
So, it is time the consumers unite to fight arbitrary and unilateral actions by the government, using the mandate they have themselves given. The silver line is that unlike in the past, this is now possible, thanks to the internet and the social media channels. They must come together and challenge the government legally in the courts, because nobody else is going to do it for them.