Fuel price cut merely a pre poll gimmick

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By indSamachar bureau: BJP president Amit Shah’s statement that the decision to cut fuel prices by Rs 2.5 shows the sensitivity of the Narendra Modi government towards the country and people is the height of hypocrisy. The claim, which came within hours of the announcement of the price reduction, amounts to indirectly admitting that the Modi government had remained insensitive to the skyrocketing fuel prices all these months, just as it has been to many other issues which made life unbearable for the people. If anything has forced Modi to act after looking away all this while, it is not because of sensitivity, as claimed by Shah, but due to panic over the cumulative effect of popular discontent and the loss of the battle of perception, thanks to the constant pumping of heat by Rahul Gandhi on the Rafale deal, where the government now appears to be manifestly in the wrong.

It is too early to say whether such small gestures can change the fortunes of the BJP government when it goes to the people for another mandate in the state assembly elections later this year or the all-important Lok Sabha poll some time next year. Reactions to the decision by the opposition parties have mostly been dismissive while those from the ruling party, including some of the ministers, bordered on sycophancy in a choreographed fashion, praising Modi for the bold move. Random public comments have been to the effect that the price cut is too little and too late to come. After effecting the cut, the Centre advised the states to make a corresponding reduction in their levies so that prices could come down by Rs 5 per litre. Some 12 states, mostly ruled by BJP, have listened, while the opposition ruled states have refused to part with their kitty from price increases.

There is a big question mark over the honesty of the price cut. The coordinated action by the Modi government, in which the oil marketing companies cut their price by one rupee while the government lowered excise duty by one and a half, further highlights the ruling party’s insensitivity towards the unbearable burden that constantly rising fuel prices have been putting on the common man. The government has taken the stand that the fuel price increases were beyond its control as the deregulation of the retail market had given the oil companies the freedom to adjust their prices according to the changes in the international crude oil market.

Nobody disputes the freedom of the oil companies to do this, but the perfect coordination between the oil companies and the government in announcing the cuts betrays an arrangement of the two working in tandem. This means that the price increases announced by the oil companies from time to time had the tacit approval of the government, although the finance and petroleum ministers kept saying they had no role. If the government can intervene to bring down the prices when it actually wants to, it also suggests its insensitivity to the sufferings of the people by preferring to look away when companies were going about merrily jacking up prices. Both the Centre and the state governments were gleefully accepting a part of the bounty, so they had no reason to stop it.

It is obvious that the sensitivity that Shah now seeks to celebrate has come in the context of the upcoming elections in Rajasthan, Madhya Pradesh Chhattisgarh and others, the results of which will have far-reaching implications for the Modi government in its desperation to ensure longevity beyond 2019. In fact, the same kind of coordinated action was on show prior to the assembly elections in Karnataka earlier this year. The oil companies had stopped their daily revision of prices in the run-up to the elections although international prices were going up. This happened after nearly a year of daily revisions, mostly on the upside as crude oil prices moved on an upward trajectory. But they also did not bring down the prices when crude fell in the international market. With elections on, the government did not want to see prices go up, and at the same time was keen that the companies did not take any hit. So it was a kind of balance between politics and economics.

But as soon as the elections got over, the companies resumed their daily revisions and the increases more than made up for whatever they were supposed to have lost during the suspension period. As the dynamic pricing system resumed a couple of days after Karnataka elections, petrol prices in Delhi shot up to near 5-year highs of that time at 74.80 per litre, although that price appears much more respectable than what it is today. Since then the prices have been relentlessly on the upswing, blamed on a crude oil market on the boil and the falling rupee, both of which are still continuing. And with another round of elections coming, the Modi government and the oil companies are back with their old games. But the farcical one-paisa cut in between will remain etched permanently in people’s mind although it did not have even a day’s life.