Fuel prices have always been central to the Indian political setup.
The crude oil-driven economy is elastic to any changes in fuel prices.
An increase in fuel prices leads to a direct increase in Inflation affecting the pockets of most of the population.
The constant fuel hikes of the previous UPA government are one of the primary reasons for its downfall.
BJP used high fuel prices and sky-high inflations as a reason to bring down the UPA government. Fuel prices had touched the Rs 100-mark at the beginning of the second week of July almost everywhere in the country.
Petrol was a little over Rs 69 per litre in April 2020 and had touched over Rs 90 at the end of March this year.
However, after coming to power the NDA government has failed to curb the increase in Crude oil prices their government has presided over a phase of high record high petrol and diesel prices.
Even when crude oil prices were really low Indian fuel prices kept on increasing.
Recently the central government has provided some relief in fuel prices.
But it is not what it seems on the surface.
VAT reduction in the BJP-led States.
The latest state to reduce fuel prices is Maharastra, the state has decided to reduce VAT (value added tax) on petrol and diesel by Rs 5 and Rs 3 per litre respectively.
This was one of the major and earliest decisions of the Shinde Government.
The state will bear Rs 6000cr by reducing petrol and diesel price by Rs5 and Rs3.
This has been a concurrent theme in all the BJP-led states.
Where the centre comes up with a cut and all the BJP-ruled states follow the move and reduce the VAT.
Even though the reduction in VAT is not even in all states but every state follows this move.
With this double reduction in tax from the centre and state the overall price of crude oil falls.
But all the major Metros of the nation weren’t this lucky till now as all Delhi Mumbai Chennai and Kolkatta are all ruled by non-BJP states until the political instability in Maharastra.
Why do Non-BJP-led states not follow this lead?
From the surface, we might think that all other non-BJP lead states are falling into political doom by not reducing the taxes.
But many opposition parties cry foul play on this scheme of the BJP.
They argue that the Centre had lowered not the excise component but the road and infra cess to Rs 13 from Rs 18 on petrol and to Rs 8 from Rs 18 on diesel.
Since the Centre has cut cess and not the excise on fuels, there is going to be no change in the revenue share states get from the Centre.
They will continue to get 41 per cent of Rs 12.40 per litre among states for unbranded petrol and Rs 9.80 a litre for diesel as per the recommendation of the 15th Finance Commission.
This means all the financial losses have to be borne by the state while the centre faces minimalistic losses.
They feel that BJP is at the centre and the state is playing this gave to de-stabilise non-BJP-ruled states and in the bargain, the state is losing a lot of taxes heavily affecting the economy.
This contempt is clear in statements of various Non-BJP ruled states’ chief ministers like Chhattisgarh Chief Minister Bhupesh Baghel who criticised the Centre for making minor tweaks to fuel prices that don’t make an impact.
He claimed that the Centre first raised the price of petrol and diesel by up to Rs 30 and then decreased it by Rs 5.
Credits:- India Today, The Wire and News 18
Featured Image Credits:- NDTV