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Interview With Pawan Khera

Interview With Pawan Khera

Crude oil prices have been rising over the past couple of months due to US sanctions on Iranian crude oil exports, higher demand and decreasing output from Venezuela. In India, oil companies have been raising fuel prices on a daily basis. As a result of it, petrol and diesel prices have gone very high. Under the mounting pressure from several quarters, the government on Oct 4 effected a ₹2.50 per litre cut in prices of petrol and diesel in an effort to ease inflationary pressure.

Anju Grover for Indian Currents spoke to Congress leader and spokesman, Pawan Khera to know reasons for hike in petrol and diesel prices.

Khera said that it is too late, too little. He further said that the government should give substantial relief to consumers who are reeling under high prices. Hike in fuel prices have a direct impact on the entire economy. He demanded that the government should reduce central excise duty substantially. Also, this issue should be discussed in GST council. According to him, the problem is far more serious than just giving little relief ahead of assembly elections in some states.

IC: Oil prices in India are rising by the day which is putting pressure on an already weakened currency. Common people are finding it difficult to bear the burden. Your views.

Pawan Khera: When the UPA II left power in mid-May 2014, international price of crude oil was 107 US dollar per barrel and petrol price was Rs 71.41 per litre and diesel Rs 55.49 per litre. Why is it that this government has failed to reduce the price? Why has this government raised central excise duty 12 times in these months by 211 per cent on petrol and 443 per cent on diesel. In mid-May 2016, the central excise duty was Rs 9.23 per litre on petrol and Rs 3.46 per litre on diesel. The excise duty was increased to Rs 19.48 per litre on petrol and Rs 15.33 per litre on diesel. From January 2018 to October 1, 2018, petrol price was increased by Rs 13 per litre and diesel by Rs 15. Now the government said that it has reduced the price. That doesn't help. The Finance Minister needs to explain it. It requires a far greater intervention like reduce central excise duty.

IC: Union Petroleum Minister Dharmendra Pradhan said the taxes collected even at the time when global crude oil prices were low, have been used to run government schemes such as Ujjwala Yojana and Ayushman Bharat and building road and railway infrastructure. In a way, he said that taxes were used for development purpose.

This government does not want to solve this problem. The government has accrued Rs 13 lakh crores in the last 52 months from fuel.  They have allocated only Rs 2,000 crores on welfare schemes like Ayushman yojna. It is a joke of governance. They should tell us why they have allocated Rs 2000 crores on welfare schemes.

The most ironic thing is that the petrol and diesel are expensive in the country but the government is exporting fuel to rich countries like US, England and Australia etc. at cheap rate. It is a betrayal.

IC: Is it not true that UPA II had done the same?

But our prices were not so low.  Despite the fact that International crude oil was expensive, the difference between domestic price and export price of oil was not so huge.

IC: Rising prices means impact on country's growth outlook because the deficit gets widened. Your comments.

The Finance Minister should give an answer to this question. People need oil for different works.

IC: India's demand for oil is increasing and oil prices continue to rise. Economists say that India will be pushed to import more oil. It would further widen its current account deficit which measures the flow of goods, services and investments into and out of the country. Do you agree?

Show me one sector which has benefitted from this data. Common people are concerned about their issues and not bothered about the data.

IC: According to a reputed Global energy consultancy Wood Mackenzie forecast, India will overtake China as the world's largest oil demand growth centre by 2024. The demand is expected to grow by 3.5 million barrels per day from 2017 to 2035, accounting for a third of global oil demand growth. How can this problem be tackled?

It has to be solved at the government level.  The government should reduce the central excise duty levied on petrol and diesel. Thursday's announcement of reduction in petrol and diesel prices by Rs 2.50 is extremely short term measure.  There should be a balanced way of levying central excise duty on fuel. The central government should hold talks with the state governments as to evolve a mechanism to bring petrol and diesel under GST. They should also discuss viability of bringing fuel under GST.  The GST council, comprising all the state governments, should discuss if petrol and diesel should be brought under GST. Will or won't it have an impact on the economy? There is a demand from economists and experts on economic affairs that petrol and diesel should be brought under GST now.

IC: Petroleum Minister Pradhan's explanation is that deteriorating economic conditions in oil producing countries like Iran, Libya and Venezuela have led to rise in crude oil prices. He also said that crude oil production has not gone up as promised by OPEC (Organization of the Petroleum Exporting Countries) to 1 million barrels per day. In these circumstances, isn't it wrong to create so much noise?

Where was this argument when Manmohan Singh was Prime Minister and BJP leaders like Sushma Swaraj created so much noise about rising fuel prices? The international crude oil price is US dollar 58 per barrel under the Modi's regime whereas it was 120-130 during Manmohan Singh's regime. The international crude oil was very expensive but today it is not. So, this cannot be an excuse for rising prices at the domestic level. This government should give substantial relief to consumers who are reeling under high prices because high fuel price has a ripple effect on the entire economy, transportation and goods and services.

IC: When fuel prices were rising during the UPA regime, the BJP accused Congress party of unleashing economic terror on the nation. Now Congress party is accusing the BJP-led coalition government of unleashing "economic terror on the nation."

Compare the crude oil prices of UPA time and now and check domestic fuel prices then and now. The picture will be clear.

IC:  Your party had announced a nationwide protest on Sept 18 on the issue, and has reached out to key opposition parties to lend support to the event demanding excise duty cut on petrol and diesel. Do you think it is a solution?

As a responsible leading opposition party, it is our duty to articulate people's anguish. Our protest has certainly compelled the government to reduce the price of petrol and diesel but that is not enough. It is too late, too little.

(Published on 08th October 2018, Volume XXX, Issue 41)