This is nothing less than organised loot by the government, simply because it has armed itself with the power to manipulate prices, despite claims of allowing free market pricing. When companies raise prices on the plea that the global crude prices have gone up, the government justifies the hike saying that it is free play for market forces.

But whenever international prices fall, the government uses it as an excuse to hike levies so that the benefit of lower crude prices is denied to the people. In a globalised world, this amounts to teasing — or rather fleecing — the citizens when they realise that their counterparts in other countries are paying so much less.

Surely, the government needs money to run itself. But that is no excuse that it can do anything to raise that money. It is a failure of the development model that we have followed that the government has to loot people’s money to finance governance. Finance to run the government has to be generated out of productivity and wealth creation and not by taxing poverty.

This is the fundamental flaw with our system of government and development. Despite three quarters of a century of independence and development having been passed, there is no sign yet of a change. That is the most miserable part of the tragedy.

The people of this country have not forgotten the farcical one-paisa cut the government effected about two years ago, when petroleum prices registered a sharp fall. Curiously, the one-paisa cut came when the international benchmark crude prices had fallen 2 percent after reaching several years’ high The cut was followed up with ridiculous explanations and calculations, which in effect meant pulling the wool over people’s eyes.

The government’s refusal to let go of petroleum products as its vital source of earning revenue makes its pious declarations in favour of alternative energy, particularly electric vehicles, highly suspicious. In fact, the government seems to have a vested interest in protecting fossil-based technologies, denounced by one and all for their threat to human survival.

The government stand is similar to Gandhi’s Khilafat movement, which sought to bring back a system rejected even by the majority of Muslim world, simply because the overthrow of Khalifa provided a cause for Gandhi to unite members of the minority community and bring them into the fold of freedom fighters.

Petroleum has become a handy tool of exploitation for the government, which may not be possible with the emerging new technologies. So, the expected breakthrough in new energy forms is as much detrimental to the conventional methods of raising finance for Indian governments as much as it will be fatal for the big oil companies.

By virtue of its policy, the Indian government is aligning its interests along those of the enemies of environment. In spite of protestations to the contrary by Prime Minister Narendra Modi and his ministers, the hard fact is that any breakthrough in new energy sources will be detrimental to the revenue model followed by our successive governments.

The Modi government keeps haranguing about electric vehicles and loses no opportunity to reiterate its commitment to promote less polluting automobiles, including lip services for the new technology in the budget and other official documents. But apart from grandstanding, these declarations have little meaning as there is no substitute yet for petroleum products to drive government coffers.

Oil marketing companies are crying foul that an Increase of every dollar in the price of the Indian basket of crude oil raises their under-recovery by around Rs. 4,500 crore, estimated on the basis of the refinery gate price as of 2013. Similarly, they claim that every one-rupee depreciation in the rupee-dollar exchange rate causes an under-recovery of around Rs. 8,000 crore. But they are not talking about what happens when the crude price falls by 1 dollar.

The fact of the matter is petrol and diesel prices are what they are today not because of the high price of imported crude. Having entered into term contracts, the prices could even work out cheaper than those quoted on a daily basis. The problem with high retail prices is due to the fact that the government treats petrol and diesel as cash cows to make money. The retail price of petrol, for instance, carries a tax component of more than half the price of the crude oil and this does not come down when the crude prices fall. The levies are marginally lower in the case of diesel. As long as retail petroleum products are used to raise resources to run the government, the consumers cannot expect the real benefit of any price declines in the international market. (IPA Service)