Centre should have created strategic petroleum reserves: Bengal Minister

Kolkata: Terming the Centre’s decrease in fuel prices by Rs 2.50 per litre as “insignificant” compared with a steep hike witnessed earlier, West Bengal Finance Minister Amit Mitra on Friday said the Centre should have created strategic petroleum reserves when global crude oil prices were low.

“This government has increased prices of petrol and diesel nine times. If you look at the central excise as a parameter, they increased it by two rupees for petrol, and Rs 11.77 for diesel. The overall price increase for petrol was Rs 16.48 and diesel Rs 24.46 under NDA rule (since May 2014). Now, they are talking of reduction of Rs 2.50 per litre. The solution would have been creation of strategic petroleum reserves,” Mitra said at the India Today Conclave (East) here.

Giving US government’s example, Mitra said that it has 774 million barrels of fuel in reserve, sufficient to run the country for 65 days even if not even a single drop of petrol is produced, while India has such reserves for only five days.

“When global crude oil prices fell significantly to Rs 30 a barrel, that was the time for a mature government to draw the reserves, build it up, so when petrol prices go up due to upward international prices — just like the US and other major economies do — they could have built a reserve of a few million barrels,” the economist turned politician said.

“As many as 30 million barrels were released in the United States during the Libyan crisis. But we do not have those reserves because when the prices were down, the government was sleeping. This shows it does not know how to govern. It runs on fiats and fights fires, but does not have a long-term strategic vision,” he alleged.

Mitra claimed that it is not “practical” to ask states like West Bengal to lower Value Added Tax to bring down fuel prices further as it has not increased either the sales tax or cess on fuel in months.

“West Bengal has not increased either the sales tax or the cess on petrol. It is the central government that is increasing the price. And then when prices go up, they turn to the states, and ask them to lower their taxes. We have not increased; we are not culpable. You are culpable; you have increased prices nine times,” the Minister said.

“Reducing fuel prices by Rs 2.50 per litre ahead of the 2019 general elections shows that the government is neither here nor there. It was too late to respond…,” Mitra added.