Defending the prime minister’s assertions, the Union minister said the burden-sharing need not be equal, but the Center has assumed its responsibility in the fuel sector, states too should take their part of the burden
Fuel price hike under the Narendra Modi government has been the lowest — 30 per cent and not 80 per cent — but basic salaries have increased over past decades, said petroleum minister Hardeep Singh Puri on Friday.
Puri was speaking on the political slugfest that has ensued following PM Modi flagging higher fuel prices in many Opposition-ruled states.
Defending the prime minister’s assertions, the Union minister said the prime minister has been consistent, he has advocated for best spirit of cooperative federalism pertaining to issues of livelihood. Burden-sharing need not be equal, but the Center has assumed its responsibility in the fuel sector, states too should take their part of the burden.
He added that the BJP-ruled states are charging VAT half of what non-BJP states are doing…There’s a difference of Rs 15-Rs 20 in retail prices of petrol between BJP & non-BJP states.
Commenting on bringing petroleum products under the GST regime, Puri said, “My understanding is Center would be happy to bring petro-diesel under GST but the fact is states aren’t willing. They make a killing from revenues of petrol-diesel and alcohol…when debt rises they blame others…Punjab is a case in point.
Drawing an analogy with the vaccine row during the second wave of COVID-19, the Union minister said, “A young aspiring leader hurled allegations at Modiji on lack of vaccines… but the fact is that domestic vaccine manufacturing capacity was demolished way back in 2010. Modiji worked hard to ensure everybody is vaccinated.”
Continuing to argue for the Centre’s moves on fuel prices, Puri said, “We’re yet to recover from a pandemic, we are still feeding 80 crore people and providing vaccines. There is war in Ukraine… Oil prices went up from $19.56/barrel to $130. Yet the Center charged Rs 32 excise on petrol and diesel. Ahead of Diwali we reduced it and rates went down.”
Speaking on India’s relationship with Russia and continuing import of crude from Moscow despite Western opposition, he said, “We are situated close to Gulf countries like Iran which has a lot of oil…We’ve energy relations with Russia, we buy crude from them but our total imports are not more than 0.2 per cent, we’re open to buying if terms are right, we’ve to look after our interests.”
What is the issue
Raising the issue of higher fuel prices in several Opposition-ruled states, the prime minister on Wednesday called it “injustice” to people living there and urged the governments there to reduce VAT in “national interest” to benefit the common man.
On Thursday PM Modi raised the issue of many states not adhering to the Centre’s call for reducing VAT on petrol and diesel after Centre slashed excise duties on them in November last, and asked them to work in the spirit of cooperative federalism in this time of global crisis.
Meanwhile, Congress leader Rahul Gandhi alleged that Modi’s federalism is “not cooperative but coercive”.
Chief Minister of Tamil Nadu MK Stalin said people were aware of the fact behind the issue and pointed to his government affecting a Rs 3-a-litre cut on petrol earlier.
“The Prime Minister had said some states were not cooperating with the Centre in its efforts to reduce the fuel prices and attributed the reasons for the rise in the price to the states as they are not reducing their taxes.
“To comment on it in one line: it is like hiding a whole pumpkin in a plate of rice,” the DMK supremo said referring to the Tamil saying (‘Muzhu poosanikkayai sothla maraikiradhu’) to buttress his claim that Modi was not revealing the facts.
Since 2014, whenever international crude rates dipped, the NDA government did not pass on the benefit to the customers but only pocketed the additional revenue earned from the differential, he said. While the excise duty levied on petrol and diesel has to be shared with states, that has been reduced, thus affecting the states’ revenue, he said.
“While the cess and surcharges are not meant to be shared with the state governments, these have been exorbitantly hiked, thus burdening people and the Union government is enjoying the revenue earned from this.”
Kerala chief minister Vijayan, in a Facebook post, said that in a federal system attempts should not be made to blame certain states for the inflation, due to a variety of reasons, in the country when the Central government was responsible for the financial management.
He further said a ruler who is aware of the current economic condition of a state (Kerala) which spends a significant amount on social welfare should not criticise it for rising fuel prices and resultant suffering of the people, especially when in the last six years it has not even once increased the sales tax on petrol or diesel.
West Bengal chief minister Mamata Banerjee alleged that the agenda of Prime Minister Modi’s meeting on Wednesday was not COVID situation as announced, but blaming state governments for the high prices of petrol and diesel.
The Centre also wanted to shrug off its responsibility in reducing the prices of fuel, she claimed while talking to reporters in Kolkata.