Rising prices including those of petrol and diesel were among the reasons that brought down the UPA government of Manmohan Singh, whom the then Gujarat Chief Minister Narendra Modi had described as a "Sardar (chief), who is not asardar (effective)".

In May 2012, the UPA government had approved the steepest ever hike in petrol prices across the country. The petrol prices suddenly went up by Rs 7.54 per litre. Petrol price in New Delhi reached Rs 73.18 a litre. Today, the petrol is available at Rs 73.73 in New Delhi.

The increase in petrol prices by UPA was done following a 14.5 per cent rise in crude oil prices and a 3.2 per cent devaluation of the rupee. As Gujarat Chief Minister Narendra Modi had termed the hike in petrol prices as "a prime example of the failure of the Congress-led UPA."

Massive hike in #petrol prices is a prime example of the failure of Congress-led UPA. This will put a burden of hundreds of crores on Guj. Narendra Modi (@narendramodi) May 23, 2012





A week later, the BJP joined hands with the Left Front to call Bharat Bandh against petrol prices. Nine months down the line in March 2013, when another fuel price hike was effected, the BJP disrupted Parliament over the issue.

In June 2013, the BJP rejected UPA's argument of devaluation of the rupee and rising crude oil prices responsible for increase in petrol prices. "This hike in petrol prices is a result of the wrong economic policies of UPA government for the last nine years. Its excuse that this hike is due to the devaluation of the Rupee is misplaced," BJP spokesperson Sudhanshu Trivedi had said.

The BJP's logic was simple: "Had the UPA government followed the right policies (to keep economy strong), it would have been in a position to provide oil subsidy."

Today, Prime Minister Narendra Modi, Finance Minister Arun Jaitley and the entire leadership of the BJP say that Indian economy is robust and growing at the fastest pace among the major economies of the world. Still, petrol and diesel prices are deregulated and rising, and there is no talk of "oil subsidy".

What happened after 2014 elections?

The BJP's campaign against fuel price rise was so incessant leading upto last Lok Sabha elections that the Manmohan Singh government had to put proposed hike in diesel price on hold in April 2014. It sensed a serious backlash in the elections, which actually happened thanks to what was described as "Modi wave" in 2014 Lok Sabha elections.

The crude oil prices welcomed the Narendra Modi government favourably giving it almost a dream run for three years before it started showing trouble signs last year. The price of the Indian basket of crude oil crashed from USD 113 per barrel in May 2014 to USD 50 by January in 2015 prompting PM Narendra Modi to thank his "luck" for reducing prices.

At an election rally in New Delhi in February 2015, Narendra Modi said, "Ok, let's accept that I am lucky but you have saved money. If Modi's luck is benefitting the people, what can be more fortunate? If due to my good luck, prices of petrol and diesel come down and common man saves more, then what is the need to bring someone who is unlucky?"

His run of good luck continued till middle of 2017. At one point in January 2016, crude oil price fell to USD 29 per barrel.

How Modi government responded?

The excise duty on petrol and diesel saw increase 12 times between May 2014 and September 2017 before it was cut by Rs 2 a litre in October last year. As per the Petroleum Planning and Analysis Cell (PPAC) data, excise duty on petrol increased by 54 per cent, VAT by 46 per cent and dealer's commission by 73 per cent during the period.

In the case of diesel, the excise duty went up between May 2014 and September 2017 by 154 per cent, VAT by 48 per cent and dealer's commission by 73 per cent.

In October last year, Modi government cut the tax by Rs 2 litre asking the states to lower VAT by the same measure. None of the states except Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh followed the direction. The Centre said it suffered a loss of Rs 26,000 crore due to reduction in excise duty on petrol and diesel.

Global prices of crude oil have been going up pushing domestic fuel prices far higher. But during the lenient phase of global crude oil prices, the Modi government kept increasing excise duty to maintain the existing petrol and diesel prices.

Duty on petrol rate was cumulatively hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre between November 2014 and January 2016. The government more than doubled its revenue from oil in these 15 months - from Rs 99,000 crore in 2014-15 to Rs 242,000 crore in 2016-17.

What is the current situation of petrol and diesel prices?

In the run up to February 1 Budget this year, Oil Minister Dharmendra Pradhan sought a reduction in excise duty on petrol and diesel but Finance Minister Arun Jaitley ignored the call to give more cushion to his chest.

Today, petrol in New Delhi costs Rs 73.73 a litre. It is the costliest since September 14, 2014 when prices had hit Rs 76.06 level. Diesel price is at the highest ever level of Rs 64.58 per litre. The previous high of Rs 64.22 was seen on February 7 this year.

At current costs, India has the highest retail prices of petrol and diesel among South Asian nations. Taxes account for half of the pump rates for each litre of petrol and diesel. There is demand for bringing petrol and diesel under GST. If it happens petrol may be available at Rs 38 a litre.