The NDA Government’s strategic oil pricing policy deserves special praise. In just five months after coming to power at the Centre, it has cut petrol and diesel prices seven times in keeping with a hefty fall of 40 per cent in world crude prices during June-November, and passed on the benefit to the consumers at large.
According to latest Oil Ministry sources, India’s average crude oil import price (Indian basket) plunged to a four-year low of $72.51 per barrel as of November end. Oil companies have reduced petrol prices by Rs. 10.27 per litre since August 1 and diesel by Rs. 6.46 since October 18. After the last revision, there is a distinct downtrend in the international prices of both petrol and diesel. Meanwhile, the rupee-dollar exchange rate has appreciated. In view of these two factors, a further decrease in retail selling prices of both fuels is warranted. Taking advantage of the falling international oil prices since June, the Government had on November 13 imposed additional excise duty of Rs. 1.50 per litre on petrol and diesel to meet the revenue deficit. Though diesel was officially deregulated, as in the case of petrol four years ago, the Oil Ministry still retains informal control on retail prices. Despite a hike in Central excise in mid-November, there was scope to reduce fuel prices by 50 paise to a rupee per litre on November 15.
With pricing policy liberalisation, the domestic oil scenario has now changed for the better. The major beneficiary of reduced oil prices is the transport sector, particularly fleet operators, the largest diesel consumers. Their stand is quite understandable: Besides increasing the burden that provokes agitation all round, frequent hikes in oil prices adversely impact transport of goods and essentials from place to place, resulting in utter dislocation of supplies and a consequent rise in prices of daily necessities. The common man is put to much hardship when transportmen suspend operation following an undue and unwarranted hike in fuel prices.