Fueling Inequality: Modi Govt’s LPG Hike Amid Falling Global Oil Prices Betrays The Poor
The irony could not be starker. Even as the global price of crude oil has plunged to a recent low of $62 per barrel, down from $78 just six months ago, the Indian government has chosen to increase the price of Liquid Petroleum Gas (LPG) by Rs 50 per 14.2 kg cylinder.
What’s worse, even the poorest beneficiaries of the Pradhan Mantri Ujjwala Yojana will now pay the same hike. In one stroke, the government has erased the distinction between the economically privileged and the underprivileged.
This is not just disappointing, it is indefensible. Adding to the burden is a two per cent hike in excise duty on petrol and diesel. True, this hike will not directly affect the consumer, but that is a poor consolation. In a country where nearly 60 per cent of the final retail price of these fuels is made up of taxes, both central and state, this move reeks of opportunism.
When global oil prices fall, it is logical to expect relief for the end consumer. Instead, the centre continues to fill its coffers at the expense of households already strained by inflation and unemployment. The increase will have a spiralling effect on the prices of all essential items.
The justification provided by Union Petroleum Minister Hardeep Singh Puri is that international LPG prices have gone up and oil companies have absorbed losses amounting to over Rs 41,000 crore. While this may be true, it is hardly the full story.
If the government could reduce fuel prices in March 2024 to curry favour with voters ahead of the general elections, why is it suddenly unable to cushion the impact now? The truth is, fuel taxation has become the government’s most convenient revenue stream. Unlike income or corporate taxes, fuel taxes are indirect and regressive, hitting the poor harder than the rich.
By refusing to adjust taxes in light of international market trends, the government signals its unwillingness to explore more equitable and progressive methods of taxation.
It is also worth recalling that Prime Minister Narendra Modi was once among the harshest critics of the UPA government’s fuel pricing policies. Back then, he demanded transparency and fairness. Today, those very principles seem to have taken a backseat. Political convenience appears to have replaced economic responsibility.
The government must remember that affordability of cooking gas and transport fuel is not just an economic issue, it’s a matter of basic dignity and survival for millions. If the centre could ease prices for political gains, it can certainly do so now for the public good. After all, governance should not be about expediency; it should be about empathy, accountability, and putting citizens before fiscal arithmetic.
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