<b>Letters:</b> Tax savvy government

With reference to the report, “LPG prices raised by Rs 86, steepest hike in India’s history” (March 2), oil firms have once again revised the rates of aviation turbine fuel (ATF) and cooking gas from March 1, based on global oil prices and the foreign exchange rate in the month before.

While the price of ATF was raised by a marginal Rs 214 per kilolitre to Rs 54,293.38 per kilolitre, the market price for non-subsidised cooking gas cylinder, LPG, shot up from Rs 651.50 to Rs 737.50 for a 14.2 kg cylinder. The hike was termed a reflection of international trends.

The report says that the latest jump in prices comes on the heels of the Rs 66.5 per non-subsidised cylinder increase effected from February 1. Thus, there has been a 58 per cent upswing in six instalments since October 2016. Meanwhile, prices of subsidised LPG cylinders went up eight times — by nearly Rs 2 per cylinder.

The government had reaped a rich financial harvest on behalf of state-owned oil marketing companies by keeping prices of petroleum products high (by hiking excise duties) even when global prices of crude oil were at their lowest — around $40 per barrel — in international markets. Of course, the government never failed to take credit for keeping its subsidy-linked bill quite low during all these years.

The current uptrend in the prices of non-subsidised gas cylinders could be the tip of the iceberg, as global prices of crude oil are bound to rise more in the near future, if recent proposals and some tactical moves of Organization of the Petroleum Exporting Countries and other oil-producing countries are any indication.

It is unlikely that the tax savvy government would consider readjusting its taxation regime (as applicable to various oil products) for the sake of domestic end users.

S Kumar   New Delhi
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