Sarvotham Nanduri, a small-time entrepreneur from Vijayawada, sighs dejectedly when asked for his opinion on the cut on petrol and diesel prices.
“Well, half a loaf is better than none,” says Sarvotham, calling it ‘too little’ and urging the Centre to usher in the promised ‘ acche din ’ for the benefit of the common man.
Bowing to shrill demands by Opposition parties and the public for some relief from the skyrocketing petrol and diesel prices, the Centre slashed excise duty on petrol and diesel by ₹5 and ₹10 per litre respectively, and urged the States to ‘commensurately reduce’ the Value Added Tax (VAT) on fuel prices to give relief to motorists. “For us, it may not mean much of a difference but the significant cut in diesel price will help farmers in the forthcoming Rabi season,” says Venkatesh Pilisetty, a student of agricultural science.
Discordant note
Striking a discordant note on the issue, many people say the government’s rhetoric about concern for farmers is mere eyewash.
“The public is anything but satisfied. It has been an age-old strategy to first effect a steep hike in prices and then announce a nominal drop during elections. Even after the cut, the price of fuel remains around ₹105 per litre,” points out Communist Party of India (Marxist) (CPI-M) State secretariat member Ch. Babu Rao, demanding a rollback to the 2014 prices when fuel cost ranged between ₹60 to ₹70 per litre.
Taking strong exception to a steep hike of ₹266 introduced by the oil marketing companies on commercial liquefied petroleum gas (LPG), Mr. Babu Rao said his party would continue to exert pressure on the Centre for a rollback of the hike.
All-India Road Transport Workers Federation deputy general secretary Ravinuthala Lakshmaiah lashed out at the Centre. “Petrol prices were not hiked anywhere in the world during the COVID-19 pandemic, except in our country. The ₹3 hike in excise duty levied in March last year (2020) was followed up by another steep hike of ₹13-per litre on petrol and ₹16 per litre on diesel within two months, in May,” he points out, adding that last year, the price of crude oil tanked to as low as $20 per barrel but the benefit was not transferred to the consumers.
Even today, he says, the crude oil prices in the international market are lower than what they were in 2014, when the BJP-led Modi government came to power. “But fuel prices have been constantly rising in the last seven years,” he says, accusing the government of “looting whatever it wanted to and then encouraging the oil companies to continue the looting spree.”
“The duty cut is meagre and deceptive,” he argues, demanding withdrawal of the entire excise duty of ₹13 per litre on petrol and ₹16 per litre on diesel levied during the pandemic period and further rollback of the fuel prices to at least what they were in March, 2020.
Dealers cry foul
While the price cut has given a small amount of solace to the consumers, petroleum dealers are crying foul over the “sudden and steep slash in the fuel rates” that has resulted in huge financial losses for them.
“Such a steep fall in fuel prices is happening for the first time in the history of the petroleum industry. Dealers across the country would have lost around ₹3,000 crore due to this rude jolt,” says president of Andhra Pradesh Federation of Petroleum Traders Raavi Gopala Krishna. “We have no clue on how to tide over this grim situation,” he says, informing that the Centre’s announcement on the price cut has caused him an overnight loss of ₹4.75 lakh.
Each petrol bunk here stocks 15,000- 60,000 litres of diesel and 5,000-30,000 litres of petrol. “The increase of prices was done in paise but the slash is in rupees, that too in one go,” he points out, adding that the dealers want the oil companies to reimburse the loss.
Petrol pump owners say that they have been losing revenue for a long time and the onset of COVID-19 in March 2020 caused a further dent due to payment defaults, slump in sales and added expenditure on safety and sanitation. “Dealers have had to invest their life savings to keep the business running and in the event of further trouble, many petrol bunks may be forced to shut down,” he says, adding that the long overdue revision of dealer margins would help the business revive.
