At a time when inflation is high, when the relentlessly increasing prices of food items like rice, wheat, sugar, edible oils, pulses, vegetables, are reflected in a high food inflation rate of 17 per cent, the Government of India has dealt a cruel blow to the people by raising the prices of petrol, diesel, cooking gas and kerosene which will further push up prices of essential commodities and have an all round cascading impact on inflation rates. No Government with even an iota of sensitivity for the suffering of the people because of price rise can take such an anti- people step. The deregulation of prices means leaving the people to the mercy of a market controlled by big MNCs and domestic corporate.
The reasons being given by the Government for this price hike are totally wrong and misleading. The Prime Minister has justified it saying it is in the interests of the country. The country of the 77 per cent who do not have more than 20 rupees to spend each day or the country of the super rich? He said that these reforms should have been done even earlier. This is an admission that it is only because of the weak opposition of the ruling parties on price of petroleum products. They are happy to indulge in dramas of abstaining from attending the cabinet meeting! This is a strange way of protesting—staying away instead of opposing and fighting! The truth is that these parties are also agreeable to this anti-people policy.
The editor of the Congress magazine has said that only Sonia Gandhi can stop this wrong policy. But even a child knows that the Prime Minister would not be able to take such a decision without her approval. The entire Congress party and its top leadership is responsible for this – they talk of the "aam aadmi" and follow policies for the "khas aadmi".
The Ministry of Petroleum and Natural Gas, Government of India has given an advertisement in the News Papers soliciting support of the people for the price hike of Petrol, Diesel, LPG and Kerosene. It is a document of deceit and deception published with public money to befool the people. It gives the various so-called reasons for the price hike.
International prices
The Government says that 80 per cent of the country’s requirement for petrol products is met by imports. Since prices change in the international market this makes a direct impact on India leading to the reason to hike prices. In other words, the price hike is due to international price rises.
How much has the increase in international prices been? Since May 2010 the international price has increased by just 70 paisa per litre of crude oil. In May 2010, international crude price was 70 dollar per barrel i.e. Rs. 21.43 per liter (1 dollar = Rs.49). Today it is 77 dollar per barrel which means Rs. 22.13 per liter (1dollar = Rs.46.22). One barrel roughly is 160 litres. So the international crude price has risen by 70 paisa per litre. But the Government has raised the prices many times more! In the last six months, the price hike by Government is of Rs. 6.44 per litre on petrol, Rs.4.55 per liter on diesel within last four months, and Rs.3 per liter on Kerosene and Rs 35 on Domestic LPG now. Secondly, in the last three months there has been no increase at all in the international prices, so why this hike now? Obviously the international price has nothing to do with the price hike of petroleum products since the last budget in February 2010.
The Government advertisement says India imports petroleum products. India imports crude oil, it does not import petroleum products, Crude oil is refined in the refineries in India to produce petroleum products like petrol, diesel cooking gas, kerosene etc. before marketing. India imports 75 to 80 per cent of its crude oil requirements. However India is more than self sufficient in oil refining and produces more petroleum products than the domestic requirements. In the year 2009 – 2010 (April-December) it has exported 28 million tonnes petroleum products against an import of 10 million tonnes.
“The government has acted in the larger national interest of saving PSU oil companies, which are Navaratnas and Maharatnas, from bankruptcy and safeguarding consumer interests.” Is it so? Are the oil companies on the verge of bankruptcy? We are not Fools nor are you either !(IOC posted net profit of Rs. 2,950 crore on an unprecedented turnover of Rs. 2,85,337)
In 1976 Indira Gandhi nationalised all the big foreign companies like Burma Shell, Caltex, Esso which were looting India. Before nationalization, these foreign companies used to charge Indian consumers at the international price of petroleum products making huge profits. This was known as import parity pricing system. Everyone knows that it is the big multi-national oil companies and cartels that together control the world’s oil markets and manipulate prices to increase their profits. In addition, the multi-national financial companies further push up prices through massive
speculation. In 1976 import pricing system was stopped. The then Government set in place a mechanism called the Administrative Pricing Mechanism (APM). The effort was to increase the domestic refining capacity and to end dependence on imports of petroleum products from foreign companies. As per APM instead of the international price of petroleum products being the basis, the actual cost of crude and refining cost of crude were assessed and a reasonable profit margin was ensured to the companies before fixing the price of products.
It is an insult to self reliance achieved in the petroleum sector, when the government advertisement tries to compare the prices of LPG and Kerosene selectively with other countries like Nepal and Bangladesh. Instead it should compare the taxing pattern of petrol and diesel with some of the developing countries.
The Ministry has forgotten its arithmetic. The fact is that the Government is earning huge amounts by putting burdens on the people. During 2009-2010 the contribution to Central Government. Exchequer by the Petroleum Sector in the form of taxes, duties, dividend etc. is more than Rs. 90,000 crore. During the year 2010-2011, after the increase in taxes, the contribution is going to be more than Rs. 1,20,000 crore. Who is subsidizing whom? And then where is this figure of Rs. 53,000 core in the budget? Where from this figure has been invented? Is it also a case of globalised arithmetic like under recovery which does not find a place in budget or balance sheet?
“A free-market regime will create competition between the public and private sectors. This will improve service and could also lead to a price war.”
These are the naked truths behind the lies of the Government! Bhrashtamev Jayate !
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