Ahmedabad: The Gujarat government on Monday announced hike in the prices of petrol and diesel each by Rs 2 per litre, which it said was necessary in view of a "significant" dip in revenue amidst lockdown and to tide over the COVID-19 crisis.
The move is expected to generate Rs 1,500-Rs 1,800 crore income for the state, said deputy chief minister Nitin Patel, who also holds Finance portfolio.
He said the new rates will come into effect from midnight tonight.
While the price of petrol per litre stood at Rs 73. 88 per litre on Monday in Gujarat, the price of diesel is Rs 72.12 per litre.
"The fuel hike step is being taken in view of the state revenue dipping significantly due to coronavirus- enforced lockdown while the state expenditure going up to fight the COVID-19 crisis," he told reporters.
Patel said the estimated loss in revenue could be Rs 24,500 crore to Rs 26,000 crore.
On the other hand, the state government had to spend a huge amount for providing free food to the poor as well as migrants, he said, adding that the state has also given the economic package worth Rs 14,000 crore to revive the economy.
"The state government also decided to borne the total expenses on medical treatment of COVID-19 patients. At the same time, the government''s regular expenses include Rs 4,600 crore in monthly salary and pensions," Patel said.
He said the government appointed a committee headed by former union finance secretary Hasmukh Adiha which suggested some ways to boost the revenue.
The salaries of ministers and MLAs have been cut by 30 per cent till March 31, 2021. There has been a freeze on the dearness allowance increase from January 2020 to July 2021. All of this would lead to a saving of Rs 3,400 crore. The increasing the price of petrol and diesel the government has put the burden on the people of Gujarat.
Deputy chief minister claimed that compared to other states, the prices of petrol and diesel are lower in Gujarat. This fact is not palatable because the condition of coronavirus in Gujarat is more serious than rest of the country. Coronavirus is still not under control with 500 positive cases being reported in Gujarat every day. As of June 15, there were 24,104 positive cases of coronavirus reported in the state and 1,506 people have died from COVID-19.
Even after the unlock-1 following two and a half months of lockdown, over 75 per cent of the trade and business In Gujarat remain closed. There are no new orders and the traders and industrialists are not paying their dues. Since there are no labourers, all production units are nearly closed. Those employed in the private sector have been getting 10 to 50 per cent reduced salaries since last three months.
Under such a difficult time, instead of giving some financial relief, the government has behaved mercilessly by increasing the prices of petrol and diesel at an inappropriate time.
The central government announced a Rs 20 lakh crore economic package and the state government a package of Rs 14,000 crore but no one has benefited from these economic packages. The government took a commendable step by providing free food grain from the ration shops to the poor. However, the middle class has been suffering.
The condition of small traders is extremely critical. Their business has not yet come back on track. Even though the government must have been aware of this situation, both the central and state government put an additional burden on the people by increasing the prices of petrol and diesel.
The international price of crude has been falling constantly. In the last one week the price of crude has fallen from 39.33 dollars to 34.72 dollars. The central government has linked the prices of diesel and petrol with the international market. The oil companies reduce the prices of petrol and diesel whenever the price of crude falls.
One fails to understand why the prices of petrol and diesel increase while the price of crude falls in the international market. Earlier the central government had imposed Rs 3 extra as excise duty on petrol and diesel and had thus not passed on the benefit of lower prices of crude in the international market.
When the price of crude was 70 dollars, the prices of petrol and diesel in India were Rs 74 to Rs 75. Today the crude price is 35 dollars and yet the price of petrol and diesel is at the same level of Rs 74. Both oil companies and the central and state governments are profiteering.
The rise in petrol and diesel prices is going to increase the inflation which will adversely affect the people. In order to put the economy back on track and increase the growth rate of GDP, it is essential to curb inflation.
Gujarat annual budget for 2020-21 is Rs 2,17,287 crore. This is Rs 12,472 crore larger than the budget for 2019-20. The members of the treasury benches in the state assembly had welcomed this budget. The 2020-21 budget had Rs 605 deficit.
Where did this deficit go? People want direct relief not a Rs 14,000 crore economic package. Withdraw the price hike on petrol and diesel and do not impose additional burden on the people in such a difficult time. If the people are not voicing their grievance now, they will give a fitting reply at the right time.
Talking to ETV Bharat, Gujarat state Congress president Amit Chavda alleged that the BJP government was plundering the people in the difficult time of coronavirus crisis. First, people were looted in the name of private hospitals. Then they were looted in the name of school fees.
Now, people are being looted in the name of hike in price of petrol and diesel. When the economic condition of people is pathetic during the coronavirus crisis, instead of providing them relief, the government is looting them.
When the crude price was falling in international market, the government did not provide any relief to the people and instead filled its coffers by increasing the excise duty on petrol and diesel. People are angry. Congress will hold protests all across Gujarat from June 17.
No one from BJP willing to respond on the price hike
Eminent economist Hemant Kumar Shah told ETV Bharat that the poor and middle class are angry by the government’s decision to hike the price of petrol and diesel by increasing the excise duty. The hike in the price of diesel will increase inflation.
It will lead to increase in the prices of food items and it would adversely affect the economy. The Gujarat government too has increased the price of petrol and diesel which is unjust. The central government had saved Rs 20 lakh crore in the last five years on account of the lower international price of crude oil. The benefit should be passed down to the people.
Also Read: Gujarat govt cut health expenditure, state suffering now: Congress
