BJP today put up a strong defence of its government after Congress accused it of not passing on the benefits of falling oil prices to consumers, saying increased VAT by states and a weaker rupee against US dollar justified the current prices.
Giving out figures, including the profits of oil marketing companies in the last few years, it rejected the Congress' charge that they were "profiteering" and defended the hike in excise duty by the Modi government, saying some of it will go to states and part of it will be used to develop highways and rural roads.
While the oil price presently at US dollar 37.81 per barrel was close to its price of US dollar 38.90 in November 2004, Rupee-USD exchange rate is currently at 66.73 against 45.13 in November 2014, according to its statement. Petrol currently costs Rs 59.98 per litre against Rs 39 in 2004.
The price of petrol has been reduced 20 times (increased 6 times) since July, 2014 and the net decrease is Rs 13.62 per litre. Similarly, the price of diesel has been reduced 16 times (increased 8 times) and the net decrease is Rs 12.88 per litre, BJP said in a statement.
All state Governments have increased VAT on petrol and diesel since July last except Assam, Mizoram, Tamil Nadu, Chhattisgarh and Gujarat, it added.
"Government of India has increased excise duty on petrol and diesel to reduce fiscal deficit. Present government is managing fiscal deficit without any cut in the budget. It is also to be noted that 42 per cent of basic excise duty is given to state governments as per recommendation of the 14th Finance Commission.
"Part of funds collected through excise duty increase will also be utilized for development of National Highways and rural roads," it said.
BJP said the prices of petrol and diesel are presently deregulated and Public Sector OMCs (oil marketing companies) decide the prices of petrol and diesel as per international prices and market conditions.
It said OMCs are suffering inventory losses due to continuously falling crude oil prices and their inventory losses in the year 2014-15 was Rs 29,234 crore and up to December, 2015 is expected to be Rs 10047 crore.
The Public Sector OMCs have kept some funds to compensate for these inventory losses, it said.
