Fuel prices: The poster child for the BJP’s mismanagement of the economy | ThePrint

The deregulation of fuel prices was meant to make things easier for the aam aadmi, it is instead being used to increase taxation.

The announcement last week of yet another hike in retail prices of petrol and diesel has created strong resentment across the country, with the average Indian citizen frustrated at the all-time high cost of these products. Their anguish has been compounded by the fact that the current upward hike has come on the heels of a consistent fall in the global price of oil over the past three years.

The UPA government had seen the problem in reverse – it came to power in 2004 with oil at $40 a barrel (and the dollar at about ₹45), and faced elections in 2014 with oil at $140 (and the dollar at over ₹60). Unable to absorb the considerable burden on the exchequer of this significant increase, the government passed on some of the cost to the consumer, and paid the price at the hustings.

At the time that Prime Minister Narendra Modi was ushering in his new government in 2014, a barrel of oil was selling internationally at $108.60. As of last week, it had fallen to $54.40 per barrel. Given that India imports the bulk of its oil and gas needs, many voters had hoped that this reduction in global prices by nearly 50 percent would have led to corresponding savings for the common domestic buyer in India. But between 2014-2017, prices in the capital region of New Delhi, for instance, have remained around ₹70-₹73. The rest of the country paints a similar picture – this, at a time when the Rupee to Dollar exchange rate has not fluctuated significantly within this period.

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Fuel prices: The poster child for the BJP’s mismanagement of the economy.