Come elections, every political party is talking about what they will give if elected. And if you have a close look at most of these manifestos, you can see several commonalities. Often, most parties make promises of moderating fuel prices, particularly domestic LPG.
Fuel prices have become a very important component in election manifestos as fuel prices – and LPG in particular – can have a big impact on the household budget, especially for the poorer sections of society. Data suggests that the cost of non-subsidised LPG cylinders from Indiane has been increasing steadily over the years and this will pinch the voter’s pocket. Energy expert Narendra Taneja said, “Political parties think BJP’s Ujjwala has delivered political dividends to the party, so they all want to copy BJP in their own way.” This trend is seen in the ongoing assembly elections as well and parties have promised gas cylinders at a subsidized rate, and some have also offered to give a certain number of cylinders for free.
Prashant Vasisht, Senior Vice-President & Co-Group Head - Corporate Ratings, ICRA Ltd, expects the prices to be stable till the elections. He said, “The auto fuel prices are expected to remain stable despite the volatility in crude prices and Rupee depreciation. Though there was a spurt in crude prices owing to geo-political issues in October, these have now declined. The domestic LPG prices were cut by the Government of India by ₹200 per cylinder and prices are expected to remain stable in the run-up to the elections.” However, it is well known that India is the one of the largest consumers of LPG and the country imports nearly 41 per cent of total petroleum product imports in terms of volume and 51 per cent of total product imports in terms of value. Even though the rates are expected to stay the same in India, prices are volatile globally.
In this episode of EnergOnomics, Richa Mishra takes a look at why fuel prices are important during elections. She also talked to Chandra Prakash, President, All India LPG Distributors Federation, and Ajay Bansal, President, All India a Petroleum Dealers Federation, to know how fuel prices impact dealers. Listen to the podcast here.