The seven-phase schedule of Lok Sabha Elections were announced on March 10, and since March 11, petrol prices have gone up by less than 1% in comparison to the earlier two months of Jan-Feb 2019.
Citizens can be thankful to the ongoing Lok Sabha polls for this bonanza. While the fuel prices in the country have stayed steady for the past couple of months (Apr-May), one cannot forget the spike of around 3.5% in petrol prices in the beginning of 2019.
But sigh……..the party may not continue for long as the Indian consumers are in for a painful price surge soon as domestic prices realign with global prices. Moreover, there could be additional price increase as the oil marketing companies move to make up for losses or profits missed during the ongoing period of delayed increases. As reported by Business Today, customers may have to deal with a daily hike after May 19, when the last phase of elections will be held.
This is not the first time we shall be witnessing such manipulation in oil prices. State-owned IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had stopped revising fuel prices for almost 14 days ahead of assembly elections in Gujarat in December 2017.
According to reports, IOC had also imposed a freeze on petrol and diesel prices between January 16, 2017, and April 1, 2017, back when the company followed fortnightly revision of fuel prices. That period had seen assembly elections in five states, Punjab, Goa, Uttarakhand, Uttar Pradesh and Manipur.
WHAT DOES THIS MEAN FOR THE NEW GOVERNMENT & THE CONSUMERS?
- Fuel prices will be one of the first challenges for India’s new government
- Although Brent crude, the global oil benchmark, has been dipping since late April – down about 7% – on supply side optimism, the weeks before had seen prices jump about 12%
- While Indian consumers have not yet had to bear the brunt of this uptick, compounded pain is likely on the cards
- Although state-controlled fuel suppliers and retailers have been tight-lipped about the reason for delaying price increases, the Opposition is already making noises about it
According to the Congress party, the Modi’s government is violating its own policy of daily price revision by advising the state oil companies to hold prices steady. Akhilesh Pratap Singh, a senior leader of the Congress party, said:
“The government should cut fuel taxes otherwise consumers will have to pay much higher oil prices once the elections are over.”
Why have petrol and diesel prices not gone up in India?
Over the last couple of months, the price of fuel has largely been flat, despite the oil price rising by close to 10%. This is mostly because the Lok Sabha Elections where the government wants to avoid doing anything that may have an adverse effect on its fortune in the polls.
Once voting ends on May 19, consumers will be in for a rude shock with a steep jump in petrol and diesel prices, as oil firms look to make up for past under-recoveries.