On July 16, 1991, the Lok Sabha witnessed an interesting question hour. George Fernandes, an opposition member, asked B. Shankaranand, petroleum minister at that time, if the government had contemplated a reduction in the prices of diesel and kerosene. The minister gave a highly cautious reply: "Any change in the prices of petroleum products is considered by the government, keeping in view supplies, growth in demand and other socio-economic factors."
Fernandes was not satisfied. He asked the Speaker, Shivraj Patil, to intervene and direct the minister to give a definite answer. The Speaker declined to give any such direction and instead requested Fernandes to ask supplementary questions if he wished to elicit more information. Fernandes used this opportunity to reveal a lot more. He sought a specific answer from the minister after reminding the Lok Sabha that the Congress government had made an electoral promise that within the first 100 days of its rule, it would arrest the price rise in essential commodities and roll back diesel and kerosene prices to levels prevailing on July 10, 1990.
L.K. Advani intervened at this stage and asked the minister to specifically reply if the government was planning to roll back diesel and kerosene prices as promised in the Congress election manifesto. Shankaranand said the government's efforts would be to achieve the objectives "as indicated in our party manifesto".
When Advani pressed for a more specific reply, Shankaranand gave an even more evasive reply and said that oil supplies, growth in demand and other socio-economic factors would be taken into consideration while fixing the price of diesel and kerosene and "the government will come forth with a proposal in the statement of the Budget when it is presented."
Fernandes was still not satisfied. He asked another supplementary question to know from the minister if the government justified the Gulf surcharge which was imposed by the predecessor government of V.P. Singh. Shankaranand was unfazed. He sought to end the debate with the following observation: "No doubt the Gulf surcharge was imposed. Under what circumstances was it imposed? The previous government knows about it, the whole nation knows about it. Fiscal measures are announced at the time of presenting the Budget. I do not want to take the time of the House in indulging myself into this aspect of fiscal arrangement."
At this stage, Jaswant Singh stepped in to ask a more relevant question: "The Gulf surcharge was imposed in a specific condition when temporarily the international oil prices had shot up to $40 per barrel. Now the oil prices had slumped to around $22. There is really no justification for the continuity of the Gulf surcharge when the international prices had slumped from $40 dollars to $22...In the light of the changed situation, will the government now drop the Gulf surcharge so that the prices automatically come to normal?"
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This question was not answered by the petroleum minister. With this had ended the interesting question-answer session on oil prices in the Lok Sabha July 16, 1991. Eight days later, Manmohan Singh, finance minister in the Narasimha Rao government at that time, presented the Union budget for 1991-92 and raised the price of petrol and liquefied petroleum gas (LPG) for domestic use by 20 per cent, kept the price for diesel unchanged and reduced the price for domestic kerosene for domestic use by 10 per cent.
The Gulf surcharge (about 25 per cent) was imposed by the VP Singh government when crude oil prices more than doubled to $40 a barrel in August 1990.
A year later, crude oil prices fell by 45 per cent. But Manmohan Singh was allowed by his prime minister to continue with the Gulf surcharge and raise prices of petrol and LPG. Some concession was shown to diesel and kerosene so that the Congress manifesto promise was seen to have been honoured.
Seventeen years later, Manmohan Singh as prime minister has allowed only a 10 per cent increase in prices of petrol and diesel and a 17 per cent increase in the prices of LPG, even though the international crude oil prices almost doubled in one year. The three responses tell a story of how governments in India have increasingly become weaker and more populist, failing to act even when the situation demands it.