And worse, govt leaves no opportunity to hike the excise duties as happened in latest move. On Saturday, govt hiked steeply excise duty on petrol and diesel by Rs 3 per liter each to garner about Rs 39,000 crore additional revenue. Modi govt repeated its 2014-15 act of not passing on gains arising from slump in international oil prices and breached the promise. Recall the days when BJP leaders in opposition (Arun Jaitley, Sushma Swaraj) used to mount pressure on the then UPA government to cut excise duties and curb fuel prices contributing to further inflation.
As of today the WTI Crude is selling at $31.73 and Brent Crude at $35.44, much lower than it used to be sold two month earlier (January 3, 2020:$63.05). Since January prices of crude oil have been coming down and on March 13 it was $31.73 a barrel, the lowest in since December 30, 2005 when it was sold at $61.04 a barrel. The petrol was being sold at Rs. 44 to 45 liter in 2005.
See the hike in excise duties. The economics of fuel prices say that when crude oil prices fall to $31 a barrel or so, petrol-diesel ought to be sold by standard price at Rs. 40 to 45 a liter if not less but with heavy excise duties, its being sold at Rs, 60 to 70 a liter, the same standard when crude price was at $70 and around. so its clear maneuvering by govt of the day, not rational management of fuel price.
So what we need to learn is that government's greed for earning more and more revenue from fuel prices is never ending process. And we should forget to get substantial relief in fuel prices even if crude prices come down to below $20 a barrel. It will add to govt's coffer only with enhanced excise duties.