Oil-price increase : Courts empowered to intervene

- Anil Narendra

 Oil companies claim that they are running into losses, which has led them to increase petrol prices from time to time. The government says that since it had de-controlled the petrol, as such its prices are to be decided by the Oil Companies. Neither the common man nor the experts are able to digest these arguments in favour of price increase. Now the Courts have also come out against the price rise. The question is, when the Oil Companies are incurring such huge losses, then wherefrom funds for opening new petrol pumps will be coming? If tax on petrol and diesel is reduced, their prices will go down. But the stand of the government is quite strange. Indian Oil, Hindustan Petroleum and Bharat Petroleum are listed as Fortune-500 companies, which are considered to be among highest profit earning companies of the world. These companies propose to open 1,100 new petrol pumps during next two years, which will cost more than 5,500 crore rupees. Wherefrom this money will come? The answer is simple, where else than from the hard-won earnings of the common man? Oil has become an important source of revenue for Central and State governments. When the petrol was deregulated during the NDA rule, it was decided that in case of increase in the crude oil prices, the government will do such adjustments so that the burden of this increase is not passed over to the common man. Then, why the present government does not reduce taxes and provide relief to people from the ever increasing petrol prices? At present, petrol-price consists of a fairly large portion as taxes. The petrol is being sold at Rs 68.65 per liter in Delhi, whereas the actual cost of the petrol is Rs 23.37, which means that rest amount of Rs 45.28 is tax. BJP leader Yashwant Sinha says that in 1998, when NDA government came to power, the crude oil prices were 10 dollar per barrel and when the tenure of their government ended, the price had reached to 40 dollar per barrel, but in spite of such a steep increase in crude prices, the price of petrol had not been increased much, as the government had adjusted the price rise in the taxes. The price of petrol was Rs 23.71 in 2004 and since then these prices have been increasing steadily. The UPA government increased petrol prices 24 times during its tenure, thus UPA has increased petrol prices by Rs 35 per liter. The tenure of the government is not yet over and it has still some time left. God knows how much increase would it make during the remaining period?

The Courts have started taking cognizance of repeated increases in petrol prices. Recently, the Kerala High Court has taken an initiative in this direction. The High Court has clearly stated that inflation is a slow poison and the governments cannot escape their responsibilities. The Court has, even asked the Indian Oil Corporation and Reliance Petroleum to submit their balance sheets and quarterly reports within three weeks. Following the directions of the Kerala High Court, questions are being raised, whether the Courts are not over-stepping their jurisdictions? Should the Courts intervene in such matters etc. etc.? Justice Shiv Kumar, former Judge of Rajasthan High Court and member of Law Commission, says that the Court has jurisdiction over everything that affects public interest. The Constitution provides us the right to live a dignified life. If the Court thinks that this right is being infringed upon by the unbridled rise in the prices, it can take cognizance of it. The Court can also investigate, is the inflation, the result of profiteering by traders. An advocate of the Supreme Court, DK Garg agrees with Justice Kumar's views. Quoting the statement of MN Venkatchallaiya, former Chief Justice and Chairman, National Human Rights Commission, in the media regarding the onion prices in 1998, he told that Justice Challaiya had said that increasing inflation is violation of fundamental rights of the people. It is just like a loot of hard-earned money of the common man. Garg says, when the question concerns fundamental rights, the Court can hear the matter. The Court has indirectly heard such matters a number of times. Comments of Supreme Court regarding distribution of free food grains to poor and statistics on poverty are the examples of Court's intervention. The Supreme Court, however, has never directly heard petitions on inflation and increased prices, but such petitions have not been accepted. He quotes Vinay Chandra Joshi case as an example. It was argued that the ruling party had announced in its election manifesto to curb the inflation, but it increased manifold after party's coming to power. This was termed as breach of promise and amounted to deceiving people. A renowned advocate, Rajiv Dhawan also agrees that the Court has never directly heard the matter of inflation. Even then, the government will have to explain the increase in petrol-prices. Was it due to increase in international crude prices or reducing subsidy on petroleum products or allowing more profits to the Oil Companies? If prices have been increased by the Oil Companies and not by the government, then the matter would fall under the Competition Law. Then, it would be decided whether this is the result of any conspiracy by Oil Companies or not?