The retail prices of automobile fuels have been skyrocketing and have reached record highs ever since the NDA came to power in 2014. Due to mismanagement by the NDA, petrol is now sold at Rs 100 per litre while international crude prices are just above $60.
In comparison, during 2012-2013, petrol was sold at Rs 66.06 and diesel at Rs 48.63 per litre as against a crude oil price of $108. Prime Minister Narendra Modi terms it as a failure on part of the UPA. This is a travesty of the truth.
In 2018, the petrol price in India was the highest in South Asia despite crude oil prices being at $56.43. Even while having the advantage of low crude oil prices of $46.17 per barrel in 2016 and $47.56 in 2017, petrol prices were as high as Rs 60 and Rs 62 per litre respectively.
Despite crude oil price peaking at $105.82 in 2014, the administered pricing mechanism introduced by UPA II ensured low petrol and diesel prices in the country, while the NDA government has utilised low oil prices to achieve fiscal targets instead of shielding the consumers from volatile international oil prices through a price stabilisation fund.
Following the report of the Expert Group on Viable and Sustainable System of Pricing of Petroleum Products, petrol price was freed and linked to the import price of crude oil and was market-determined. Domestic prices of petrol and diesel are revised by oil marketing companies based on the changes in international prices. But instead of passing on the benefit of low crude price to consumers, fuel is being brutally taxed by the present regime. Today, India has one of the highest rates of taxes on both petrol and diesel.
The central government and several state governments have significantly increased the duties on petrol and diesel as a way to boost revenues. The excise duty levied by the Centre is the biggest component of the price of petrol.