Opposition Accuses PM Modi Of Playing Politics Over Fuel Prices

The Opposition accused Prime Minister Narendra Modi of playing politics during his meeting with chief ministers on Covid situation by raising the issue of fuel prices and "passing the buck" on to states to reduce prices of petrol and diesel. 

As the prime minister's remark triggered a war of words, BJP says the Opposition's stance reeks of hypocrisy and alleges that for every litre of petrol, opposition-ruled states were earning twice as much as the BJP-ruled states.

Congress leader Rahul Gandhi on Thursday hit out  at Prime Minister Narendra Modi, saying his federalism is "not cooperative but coercive". His remarks came a day after Modi flagged higher fuel prices in many opposition-ruled states and urged them to reduce VAT in "national interest" to benefit the common man and work in the spirit of cooperative federalism in this time of global crisis.

Gandhi alleged that the prime minister is abdicating his responsibility by blaming states for the high fuel prices even when the Centre has taken 68 percent of all fuel taxes. "High Fuel prices - blame states. Coal shortage - blame states. Oxygen shortage - blame states," he said in a tweet. "68% of all fuel taxes are taken by the Centre. Yet, the PM abdicates responsibility. Modi's Federalism is not cooperative. It's coercive," Gandhi charged.

He also alleged that the Modi government has earned as much as Rs 27 lakh crore from taxes on petrol and diesel and demanded an account of the money. 

"Modiji, no criticism, no distractions, no Jumlas! Excise Duty during Congress Government - Petrol - Rs 9.48/litre and Diesel - Rs 3.56/litre. Modi Government - Petrol - Rs 27.90/litre and Diesel - Rs 21.80/litre. Please roll back the excise hike of Rs 18.42 in Petrol and Rs 18.24 per litre in Diesel," Surjewala said on Twitter.

Randeep singh Surjewala said that the party will urge the states to decrease VAT on fuel to pre-May 2014 level, but the centre must also admit that it earned Rs 27 lakh crore in earnings from petrol and diesel, against Rs 16.5 lakh crore earned collectively by states. "The central government revenue from petrol/diesel has doubled in 8 years," Surjewala said.

The Congress leader said that on May 26, 2014, when Prime Minister Modi assumed charge, the crude oil was US $108, but petrol and diesel was at Rs 71.41 and Rs 55.49 per litre.  “But today, crude oil is US $100.20 per barrel, but the petrol/diesel prices have been increased to Rs 105.41/litre and Rs 96.67/litre in Delhi,” he said.

"Modiji, no criticism, no distractions, no Jumlas! Excise Duty during Congress Government - Petrol - Rs 9.48/litre and Diesel - Rs 3.56/litre. Modi Government - Petrol - Rs 27.90/litre and Diesel - Rs 21.80/litre. Please roll back the excise hike of Rs 18.42 in Petrol and Rs 18.24 per litre in Diesel," Surjewala said on Twitter.

Aggrieved over Prime Minister Narendra Modi laying the blame of rising fuel prices on non-reduction of VAT by states like Kerala, state Finance Minister K N Balagopal on Wednesday hit back saying the increase in petrol and diesel rates was due to the cess and surcharge levied by the Centre. He said Kerala has not increased taxes on petroleum products in the last six years.

When the state government has not increased taxes on petrol or diesel by even one rupee in the last six years, then how can it be asked to reduce taxes, Balagopal asked. He further said the reason for rise in fuel prices was not due to increase in state taxes, but the cess and surcharge levied by the Centre on sale of petrol and diesel which amounts to cutting into the state's share of the revenue from petroleum products.

The minister said that cess and surcharge are to be levied only in special circumstances like natural calamities, pandemics, etc. and for a specific period like six months or a year. They cannot be levied for an indefinite period of time, even the Supreme Court has said so, Balagopal claimed while speaking to reporters here in the wake of Modi's statement that many states were not adhering to the Centre's call for reducing the Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last year, and called it "injustice" to people living there and also harmful for neighbouring states.

Balagopal said the Prime Minister should not have made such statements as they lead to misunderstanding among the general public. The minister further said the Centre has no right to collect revenue from the state by levying cess and surcharge on the taxes on petroleum products. Moreover, the state is not even given a penny from the revenue generated via the cess and surcharge, the minister said and added that this affects the economy of the state and also its interests.

He further said if the cess and surcharge are withdrawn, that itself would considerably reduce the fuel prices. Balagopal claimed that the opposition-ruled states are being targeted in this manner. He also claimed that earlier Kerala was receiving 3.92 per cent from the taxes collected by the Centre, but that has been cut down by half and in such a situation how can the state be asked to reduce taxes. The minister said such actions of the Centre could end up destroying the state and the federal character of India.

He also said many states in the GST Council have sought doing away with the cess and surcharge, but the Centre has not agreed to that. Balagopal said these issues and concerns would be raised by the Kerala government and by him in the appropriate forums and they have been raising it in the past also in various platforms and before the Union Finance Ministry, but to no avail.

Tamil Nadu Chief Minister M K Stalin hitting out at PM Modi over the issue of tax cuts on petroleum products said that people were aware of the fact behind the issue and pointed out at his government effecting a Rs 3 a litre cut on petrol earlier. Making a statement in the Tamil Nadu Assembly, Stalin said since 2014, whenever international crude rates dipped, the NDA government did not pass on the benefit to the customers but only pocketed the additional revenue earned from the differential.

Referring to a Tamil saying, he indicated that the PM was not revealing the facts. While the excise duty levied on petrol and diesel has to be shared with states, that has been reduced, thus affecting the states' revenue, he said. "While the cess and surcharges are not meant to be shared with the state governments, these have been exorbitantly hiked, thus burdening people and the union government is enjoying the revenue earned from this," the CM added.

He also accused the Centre of "pretending" to have reduced the fuel-related taxes due to "elections in some states," in an apparent reference to the polls held earlier this year in five states, including Uttar Pradesh, Punjab and Goa. "A week after the state elections, the prices were hiked and the Union government imposed further burden on people," he charged.

However, soon after winning the elections and forming the government last year, unmindful of the fiscal position, and according priority to people's welfare, his government had effected the tax cut for petrol even before Centre did, Stalin pointed out."People know all this. Who shows real keenness in reducing petrol rates and who pretends and lays the blames on others--I leave it to the people to decide," Stalin said.

President and Chief Minister K Chandrasekhar Rao said that Telangana has not hiked fuel prices since 2014 when TRS assumed power and the central government has no right to ask the state to reduce the taxes. In his concluding remark at the Telangana Rashtra Samithi's 21st Foundation Day celebrations here, the chief minister described the video conference held by Prime Minister Narendra Modi on COVID-19 situation as "drama conference".

"The PM held a video conference with CMs on the corona situation... In that conference, he (Modi) talks about reducing taxes on fuel. Can the PM talk like this?" Rao said. Had Modi been concerned about the public, his government would not have hiked petrol and diesel rates and even the cess, he asked.

"After Telangana state was formed, we have never raised petrol and diesel prices. It has been raised by the BJP government at the Centre. We have not raised taxes, why should we reduce it?" he said. "This is undesirable, unwanted and uncalled for," he said adding that the Centre is not ashamed of asking the states to reduce taxes on fuel when it itself had hiked it.

Reacting to Modi's remarks at the meet, West Bengal Chief Minister Mamata Banerjee said the interaction with him was completely one-sided and misleading. "Facts shared by him were wrong. We have been providing a subsidy of Re 1 on every litre of petrol and diesel for the last three years. We've spent Rs 1,500 crore on this," Banerjee told reporters in Kolkata.

She claimed there was no scope for the chief ministers to speak at the meeting and hence, they could not counter the prime minister's statement. "It would have been better had the PM not spoken on fuel price hike in a COVID-19 review meeting, it was his agenda," she said.

Shiv Sena leader Priyanka Chaturvedi also slammed the prime minister, alleging that he made the "COVID meeting about politics". "The central government has earned 26 lakh Crore out of central excise on fuel, increased 18 times even when oil prices hit rock bottom. The GST share to states still owed, compensation component to state done away with and now pointing fingers," she tweeted.

(with inputs from PTI)