Mumbai: As petrol and diesel prices nationwide soared to record highs of Rs 80.73 and Rs 72.83 in Delhi on September 10, 2018, and opposition parties observed a nationwide shutdown, the ruling Bharatiya Janata Party (BJP) tweeted graphics that suggested that fuel prices had steadily increased from May 16, 2004, just before the opposition Congress had formed a coalition government, until May 16, 2014, just before the current BJP-led government was formed, and had then fallen until September 10, 2018.
In fact, the graph incorrectly depicted bars not made to scale, with the bar for fuel prices on September 10, 2018 (petrol at Rs 80.73 and diesel at Rs 72.83) shorter than the bar for May 16, 2014 (when petrol was priced lower at Rs 71.41 and diesel at Rs 56.71).
Truth of hike in petrol prices! pic.twitter.com/hES7murfIL
— BJP (@BJP4India) September 10, 2018
Truth of hike in diesel prices! pic.twitter.com/gF7CWHeiti
— BJP (@BJP4India) September 10, 2018
A correct graph would have shown bars built to scale, so that the bar for September 10, 2018, would be bigger.
The graphics were widely criticised in the media and particularly lampooned on social media.
I’m pretty certain that if you’re willing to believe demonetization was a brilliant policy you’ll also find a way to believe that 80 is less than 71. pic.twitter.com/7pyxQkTef7
— Sadanand Dhume (@dhume) September 10, 2018
Many commentators pointed out that international crude oil prices, a major component of retail fuel prices, have actually fallen 30% from $106.8 per barrel in May 2014 to $75.13 in September 2018–during the rule of the present BJP-led government–but petrol and diesel prices have steadily increased. Yet, the government has ruled out reducing taxes on petrol and diesel, as The Indian Express reported on September 11, 2018. Cutting taxes could reduce retail prices.
During the previous two United Progressive Alliance (UPA) government terms, crude oil prices had recorded an 84% increase between May 2009 and May 2014, and an 61% increase between May 2004 and May 2009.
“What the BJP would like the viewer to believe is that prices were terribly low in 2004, when they were in charge, and shot up massively under the Congress-run UPA government, while the BJP managed to slow down the price rise,” this story in Scroll.in pointed out on September 11, 2018, adding, “this entirely misses the context of international crude prices and inflation being far lower than (sic) under Modi than they were during the previous regime, and yet the price within India remaining stubbornly high.”
Prices of petrol in Delhi increased by 20% from Rs 33.7 in April 2004 to Rs 40.6 in April 2009, data from the Petroleum Planning & Analysis Cell, a wing of the petroleum & natural gas ministry, show. Petrol prices further escalated by 76% to Rs 71 as on April 16, 2014, and by 13% to Rs 80.7 as on September 10, 2018.
Prices of diesel increased by 42% from Rs 21.7 in April 2004 to Rs 30.9 in April 2009, again up by 84% to Rs 56.7 as on May 16, 2014, with 28% increase over the last four years to Rs 72.8 as on September 10, 2018.
Since the BJP-led government of Prime Minister Narendra Modi assumed office on May 26, 2014, petrol prices have increased 10% from Rs 73.6 on June 1, 2014, to September 10, 2018; diesel prices 26% from Rs 57.84 to Rs 72.83.
Petrol price has risen by Rs 3.65 a litre and diesel by Rs 4.06 per litre since mid-August, the biggest increase witnessed in any month since the launch of daily price revision in mid-June last year, the Times of India reported on September 10, 2018.
The government implemented daily pricing of petrol and diesel prices starting June 16, 2017, to align with international practice. “This has helped consumers,” the 2017-18 annual report of the petroleum and natural gas ministry said.
The prices of petrol and diesel have been market-determined since June 26, 2010, and October 19, 2014, respectively. Oil marketing companies have since then taken decisions on fuel pricing in line with international market prices and domestic conditions.
At present, the price charged to a dealer for petrol is Rs 40.45 per litre in Delhi (as on September 10, 2018). A dealer commission of Rs 3.64 per litre is added, along with central and state taxes–the value added tax (levied by states) on petrol is 27% in Delhi, which amounts to Rs 17.16 per litre, and the central government’s excise duty is Rs 19.48 per litre–which adds up to the Rs 80.73 per litre that the retail consumer pays.
As stated before, international crude prices have fallen 30% from $106.8 per barrel in May 2014 to $75.13 in September 2018, but had increased 84% and 61% during the period corresponding to the two previous UPA governments.
Here’s how the average citizen feels the pinch
Public transport in India relies heavily on diesel, which accounts for nearly 40% of all oil products consumed in India. “Diesel also has a trickle-down effect on inflation: Higher diesel prices mean higher freight, and higher freight makes transportable goods more expensive,” Bloomberg reported on April 30, 2018.
“Petrol is no longer a good consumed only by the rich,” Kirit S. Parikh, chairperson, Integrated Research and Action for Development, opined in The Indian Express on June 5, 2018. “On March 31, 2016, there were 169 million registered two-wheelers in the country, most of them run on petrol,” he said.
“The number of two-wheelers is growing at around 12 percent per year…around 70 per cent of the households have a two-wheeler…many of which use them for daily commuting to work. This explains why the media is screaming about the impact on the aam aadmi of the price of petrol,” Parikh said.