Déjà vu: Polls, politics and fuel prices

“Election over, loot resumes,” Congress leader Rahul Gandhi on May 6, 2021 – just two days after votes cast in the assembly polls in Assam, Kerala, Tamil Nadu, West Bengal and Puducherry were counted. His tweet came after petrol and diesel prices climbed for the third consecutive day across the country. Just 10 months later, on March 5, two days before the final phase of polling in Uttar Pradesh, he again issued a warning on Twitter: “Get your petrol tank full immediately. The Modi government’s ‘election’ offer is going to end”.

It is deja vu of sorts when it comes to elections in the recent past and the freeze during the polls and the rise in fuel price immediately after the results are in. Is someone reading too much into the freeze on fuel price hike? Is it just a poll-time propaganda by the opposition? The recent months could give one a bird’s eye view. Petrol and diesel prices were not raised since November 4 last year. One could argue that the cut in excise duty on petrol and diesel on that day and the subsequent unofficial freeze on hike was to put more money into the pockets of common men hit by the Covid-19 pandemic. The international crude oil prices have crossed the $100 per barrel for the first time in several years after the Russian invasion of Ukraine, but the oil companies in India have not gone for a hike even by a single penny although their account books are bleeding.

Reports have already suggested that a hike is in the offing after March 10 counting of votes in Uttar Pradesh, Uttarakhand, Punjab and Goa, where the assembly polls have been held over the past few weeks. For the record, oil companies are free to fix the prices based on market realities without any interference from the government after the deregulation of the pricing mechanism – by the UPA government in 2010 in the case of petrol and by the Modi government in 2014 in the case of diesel. In 2017, the Modi government made another change by allowing the oil companies to increase or decrease fuel prices daily on the basis of international prices of crude oil.

Read | Crude shock: Road ahead for India

While the international crude price was around $105 in 2014 and on a decrease since then before it again rose above $100 in the last few days, the consumers were not benefited as the government decided to milk the fuel for boosting its revenues. In September last year, crude prices were around $71. During the election seasons, the common man enjoyed relief, but for a few days. The run-up to 2015 Bihar Assembly polls saw oil companies putting off a Rupee 1 per litre hike on petrol and Rs 2.28 per litre hike on diesel prices as the BJP was taking on JD(U), which had then joined hands with the RJD and the Congress. Was it a one-off incident?

5 years ago

And it was the same five years ago when the same set of states went to polls as it is now. Take the case of Gujarat Assembly elections in December 2017. For 14 days, there was no revision of fuel prices. Soon after the polls and counting of votes, the prices started increasing. Six months later, in May 2018, people got some respite as Karnataka went to polls. For 19 days, there was a freeze on petrol and diesel prices despite crude prices rising by around $5. However, immediately after elections, reports said, fuel prices were increased – Rs 3.8 on petrol and Rs 3.38 on diesel over a few days.

Same was the case during the Lok Sabha elections as well as the assembly elections to Bihar in 2020 and West Bengal, Tamil Nadu, Kerala, Assam and Puducherry in 2021. After the last phase of Lok Sabha elections, 83 paisa per litre on petrol and 73 paisa per litre on diesel were increased in nine days. In May 2021, the prices that were in a frozen state for around 20 days started moving up soon after the counting of votes. In three days since May 4, 2021, petrol and diesel prices were up by 30 paisa per litre.

“This is the biggest fraud on people when you say the fuel prices are determined by oil companies and not the government. The government has a clear role in it and that is obvious during every election. Now people have to anticipate a huge hike,” CPI(M) General Secretary Sitaram Yechury told DH.

In May 2011, the then Gujarat Chief Minister Narendra Modi had ripped apart ruling UPA for “massive” hike in fuel prices saying it will put a burden of hundreds of crores of rupees on his state. Now, as Prime Minister, he is facing a backlash. His opponents are sharing images of A B Vajpayee’s protest against fuel hike in 1970s while several are mocking BJP leaders’ protest during the UPA period. The question now is when the fuel price hike is returning.