Chuppala Nagesh Bhushan
Every time you pull into a petrol station, you aren’t just
fueling your vehicle; you are participating in one of the most sophisticated
economic extractions in modern history. There is a palpable, justified rage
boiling among consumers who see the global cost of raw materials plummet while
their own cost of living sky-rockets.
The central question is a mathematical nightmare: Why is
petrol draining your wallet at over ₹100 per liter today, when the crude oil
used to make it is significantly cheaper than it was in 2014? As an advocate
for the consumer, it is time to peel back the layers of government policy and
expose how a systematic tax trap has been engineered to ensure that while the
state coffers swell, the common man is systematically fleeced.
The 2014 vs. Today Reality Check: The Raw Material Paradox
To understand the sheer scale of this disconnect, we have to
look at the hard data. In any honest market, when the cost of a raw material
drops, the final product follows suit. In India, that logic has been turned on
its head.
|
Component |
2014 (Pre-Current Admin) |
Today |
|
Crude Oil (Per Barrel) |
$105 |
$96 |
|
Petrol Price (Per Liter) |
₹72 |
₹100+ (Delhi: ₹102 / Mumbai: ₹111) |
The numbers don't lie. The raw material is cheaper today than
it was a decade ago, yet you are paying nearly 40% more at the pump. This isn't
a market fluctuation; it is a policy-driven heist.
The Silent Surge: The Excise Duty Pivot
The "secret sauce" behind your expensive commute is
the government’s aggressive manipulation of Excise Duty. Before the current
administration took office, the excise duty on petrol was a manageable ₹9.48
per liter.
As international crude prices began to slide, the government
saw an opportunity—not to provide relief to the citizens, but to intercept the
savings meant for the common man. They didn't just maintain the tax; they
siphoned off the market's downward trend by hiking the duty to ₹11, and
eventually much higher.
"The entire story is even more shocking. In 2014...
excise duty was ₹9.48 per liter... as international prices fell, the government
increased excise duty instead of making petrol cheaper... eventually reaching
₹32 per liter."
By the time the government finished "adjusting" the
rates, the excise duty had been bloated to a staggering ₹32 per liter.
This was a deliberate pivot that ensured any "good days" in the
global oil market were strictly reserved for the government’s balance sheet.
The Missing COVID Dividend: A ₹40 Dream Denied
The most egregious example of this systemic fleecing occurred
during the 2020 global pandemic. While the world stood still, the crude oil
market suffered a historic 69% crash. For a public struggling with job losses
and economic uncertainty, this should have been a lifeline.
If market dynamics had been allowed to function, petrol
could have been sold to you for just ₹40 per liter.
Instead of passing on this "COVID Dividend," the
government engineered a double-blow. In May 2020, they hiked the excise duty by
an additional ₹10 per liter. They effectively withheld a 69% discount from the
public, choosing to bolster state revenue at the exact moment the citizenry was
most vulnerable.
Asymmetric Pricing: Heads They Win, Tails You Lose
The current pricing strategy is a cynical "one-way
street." We saw this clearly during the 2022 Russia-Ukraine conflict. The
moment crude oil prices ticked upward, the government was lightning-fast to
hike petrol prices by ₹5.6 per liter, citing "global pressures."
However, when crude prices corrected and fell in 2023, the
silence at the petrol pump was deafening. There was no price reduction. This is
the ultimate "heads they win, tails you lose" scenario: the public is
forced to bear the immediate burden of every global crisis, but they are
strictly excluded from the profits of every recovery.
The Ethanol Scam: Who Really Benefits?
If you think you’re at least buying "pure" petrol
for these premium prices, think again. The fuel in your tank is now a 20%
ethanol blend.
This is where the "mystery" turns into what many
characterize as a blatant scam. Ethanol is a cheap additive, with a wholesale
price of roughly ₹60–65 per liter—about 20% cheaper than petrol. By diluting
the product with a cheaper substitute, the retail price should have dropped
accordingly. It didn't.
So, where is that 20% saving going? The sources points to a
specific and unsettling direction: the primary beneficiaries of this ethanol
mandate are the government ministers and their children who dominate the supply
chain. While you pay for petrol, you’re receiving a diluted product, and the
profit margin is being siphoned off by the political elite.
A Final Thought for the Road
The evidence is overwhelming: fuel pricing in India is no
longer a reflection of market reality; it is a tool for state profit and
cronyism. From the aggressive tax hikes during the pandemic to the siphoning of
ethanol savings, the consumer is consistently the loser in this equation.
As we look at the global market, we see that when "good
days" (Acche Din) finally arrive for crude oil prices, the government
snatches the profit for itself. But when the "bad days" come, the
burden is placed squarely on your shoulders. It is time for every consumer to
ask: if the benefits of a cheaper world never reach our pockets, who exactly
are these "Good Days" for?
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