Finance minister Arun Jaitley. Photo: Mint
Finance minister Arun Jaitley. Photo: Mint

Petrol price cut: Jaitley questions commitment of Rahul Gandhi, his allies

In a Facebook post, finance minister Arun Jaitley accuses government critics of doing a 'volte face' by terming the cut in petrol and diesel prices by 2.5 per litre by the Centre as 'bad economics'

New Delhi: With non-BJP ruled states refusing to cut taxes on fuel, Finance minister Arun Jaitley on Saturday questioned Congress president Rahul Gandhi and his “reluctant allies" whether they were only committed to tweets and television bytes when it came to giving relief to the common man.

In a Facebook post titled ‘The oil prices and the hypocrisy of the opposition’, Jaitley accused government critics of doing a ‘volte face’ by terming the cut in petrol and diesel prices by 2.5 per litre by the Centre as ‘bad economics’.

He said states collect extra taxes when oil prices go up since their taxes are ad valorem.

“Yet we have a situation where a number of non-BJP non-NDA states have refused to pass on any benefit to the consumer. What are the people supposed to conclude? Are Rahul Gandhi and his reluctant allies only committed to tweets and television bytes when it comes to give relief to the common man?" Jaitley said.

He said the challenges thrown up by the increase in the international price of crude oil was serious and won’t be resolved by either tweets or television bytes of some Opposition leaders.

“Must not the non-BJP states be candid with the people and tell them that both in 2017 and 2018 they refused to give any relief to the people even from their higher revenues. They sent out tweets and gave television bytes but when it came to performance, they looked the other way."

The government on Thursday announced a 2.5 per litre cut in petrol and diesel prices, of which 1.5 per litre is due to the reduction in excise duty and the remaining 1 per litre will be absorbed by oil marketing companies.

It also appealed to state governments to cut VAT rates. BJP-ruled states sich as Gujarat, Maharashtra, Uttar Pradesh, Tripura, Assam, Jharkhand, Haryana, Himachal Pradesh and Madhya Pradesh followed suit.

Non-BJP ruled states, including Kerala, Karnataka and West Bengal, refused to cut taxes.

Jaitley said the political crisis in Venezuela and Libya had adversely impacted oil producing countries and US sanctions on Iran also increased uncertainties over supplies.

He said the high cost of crude oil has also impacted the currency situation.

“India’s macroeconomic fundamentals with regard to its fiscal deficit, inflation, foreign exchange reserves etc. are fairly stable. Tax collections are encouraging," Jaitley said.

However, a high cost of crude oil adversely impacts the current account deficit. That, in turn, impacts the currency. Additionally, the hardening of the dollar has further impacted most global currencies.

“Both the factors have an impact on the cost of fuel available to a citizen," he said, adding, the cost of crude oil was at its highest in the past four years.

Stating that the government critics rejoiced the political consequences of the increase of the crude prices, Jaitley said when the price was reduced, the critics did a “volte face and argued it was bad economics".

“Even Rahul Gandhi, whose party had inflicted a double digit inflation on India during the past five years of UPA-II, gave television bytes and released tweets advocating a price reduction," Jaitley said.

“Let me categorically assure all that there is no going back on deregulation of oil prices," he added.

He said the NDA government had an “exemplary record" of fiscal prudence and had maintained the gradual glide path since 2014 to bring down fiscal deficit. “We will continue to do so".

“No government can be insensitive towards its people," Jaitley added.

Last year in October, when oil prices were rising, the Centre reduced excise duty by 2.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.