The Modi government would have easily preferred populism over fiscal prudence. It could have drastically reduced petrol and diesel prices by over Rs 11 per litre to gain instant popularity. But, it prefers increasing excise duties while simultaneously reducing retail prices of petrol and diesel. Certainly, this is in the national interest for a country that imports 80% of its crude oil requirement. Global oil prices are unpredictable. Today, it is moving down towards $20 a barrel. The trend may also reverse in no time and it may soar again. We saw this trend in 2008 when crude oil prices touched $147 a barrel in July that year. Finance Minister Arun Jaitely’s excise duty hikes will build a cushion to save the country in such difficult days. Besides, abnormally low fuel prices will encourage consumerism and damage the environment by spurring automobiles sales. This will increase pollution and encourage wastage of scarce energy resources. It is good to use this windfall gain in meeting our revenue deficit rather than encouraging consumerism.
– Rajeev Jayaswal
(Also published in Amar Ujala, Jan 18, 2016, http://epaper.amarujala.com/dl/20160118/11.html?format=pdf)