Govt sensitive, will take right decision: BJP on fuel prices

BJP sources said the government would “look into what can be done”. “If it does not get resolved soon, the government will take some significant steps. The government is already exploring the options,” said a senior party leader.

The leader explained that the Centre has not intervened so far because the increase in the prices cushions the state finances as they are also depending on taxes on petroleum products at a time they are shifting to a new tax regime, GST. Fuel prices are outside the GST. “States run with this money,” he said.

This assumes significance as it comes a few days after Union Petroleum Minister Dharmendra Pradhan ruled out government’s interference in the increase in fuel prices. Pradhan had said dynamic fuel pricing mechanism was the most transparent model for consumers and the government would not be able to change it immediately.

Till mid-June this year, the state oil companies had been used to revise prices fortnightly to align them with international rates and factor in fluctuation of currency rates. From June 15, daily revision mechanism has been introduced, resulting in an instant transfer of a rise or fall in international oil price to the consumers. The dynamic daily pricing model has drawn flak because ever since it was implemented, the price of petrol has gone up from Rs 63.09 in July (weighted monthly average of petrol retailed by Indian Oil Corporation in Delhi) to Rs 70.52 on September 21.