In these tough times, there is little respite for the poor consumer. Petrol and diesel prices have been increased in metros on Wednesday for the 11th straight day, pushing up petrol prices by 55 paise and diesel by 60 paise per litre compared to the previous day in Delhi.
Over a 11-day period, the cumulative price of petrol has gone up by Rs 6.02 and diesel by Rs 6.4 per litre, a hike of 8.5% and 9.4% respectively in just 11 days.
The blow is harder for the common man as there was a price freeze for 82 days of the lockdown, before the oil marketing companies (OMCs) began hiking fuel prices again from June 7.
The OMCs say they are recovering some of their losses after the Centre last month increased the excise duties of petrol and diesel by Rs 10 and Rs 13 per litre.
This is little solace to the poor consumer, who has watched international crude oil prices sink to their lowest in two decades at $20 a barrel but finds he is hardly a gainer as the government spirits away the savings from oil imports by levying excise duty.
Even today, while international Brent crude was retreating to below $40 a barrel because of a renewed fear of the pandemic resurfacing, OMCs in India were busy hiking prices.
With India importing over 80% of its oil needs, our oil import bill could drop as much as 35-40% to $65-70 billion in FY 2020- 21.
In the short term, the government is gaining huge revenue by cornering the savings in the form of additional taxes.
Surely the consumer too deserves a share of these gains. But that is not to be. It is ironic that these hikes are being made at a time when the government is promising stimulus and other reliefs.
It is also proven that an increase in fuel prices have a huge inflationary, cascading effect because of higher transportation costs, and it results in a hike in the prices of essentials. It is time consumer interests subsume this myopic vision aimed at short-term gains.