'Very high fuel prices hurting public', says Union Minister Nitin Gadkari

Mumbai: As fuel prices inch closer to the psychological Rs 90-mark in the city where petrol and diesel are the costliest, Union transport minister Nitin Gadkari on Tuesday admitted that fuel prices are "very high and hurting the public".

While petrol was selling at Rs 89.54 a litre in the city on Tuesday, up 10 paise from Monday, and diesel at Rs 78.42, up nine paise, in over a dozen cities in the state, petrol is already selling at Rs 90-91 a litre, and diesel over Rs 80.

".... one thing is there that (fuel) rates are very high and it is a situation where definitely people are facing problems," Gadkari said while addressing the third Bloomberg India Economic Forum in Mumbai.

Gadkari also said he has been told that there is a likelihood of the global crude prices going down. He, however, did not clarify on the source of his information.

The minister, who is in charge of shipping, ports, road transport and also Ganga rejuvenation, was replying to a specific question on high fuel prices and if we should expect any duty or tax cuts in order to make it cheaper for the common people, and said lowering taxes is not in his remit, but of the finance minister.

It can be noted that Maharashtra has the highest fuel cost among all the states as it charges the highest VAT on the petrol and diesel at a little over 39 per cent, including the Rs 9 surcharge on petrol and Re 1 on diesel. While the state charges 25 per cent value-added tax on petrol in Mumbai, Thane, and Navi Mumbai, it charges 26 per cent in the rest of the state.

For diesel, VAT is 21 per cent in Mumbai, Thane and Navi Mumbai, and 22 per cent rest of the state, with a surcharge of Re 1 a litre across the state. Petrol and diesel prices in Mumbai have gone up by Rs 2.60 and Rs 4.03 a litre, respectively, since August 31.

In cities like Parbhani, Nandurbar, Nanded, Latur, Jalgaon, Beed, Aurangabad and Ratnagiri, among others, petrol has crossed the Rs 90-mark on Sunday.

The issue of high fuel prices, which will directly trickle into inflation, comes months ahead of the general elections scheduled for next year. If anything, the depreciation of the rupee against the dollar only aggravates the pain.

Gadkari, however, said that he is confident of the BJP retaining power in the 2019 elections on its performance in the government and enlisted a slew of schemes which it has carried out in diverse sectors including social security and financial inclusion. The minister said that he does not have any ambitions of becoming the Prime Minister even if any difficult situation were to arise. "Modiji is going to be our prime minister. We are all with him, we support him and we are confident that in the next election, he will be our next prime minister," he said.

Gadkari said there are projects close to his heart, including the Rs 2-lakh-crore river-linking project that will connect five rivers, and Ganga cleaning project, and he wants to see them get completed. He rued that agriculture is not economically viable, stressing on the need for more policy focus on this area and pitched for a shift in crop patterns in the country to support the country's energy needs.

Gadkari said irrigation is of prime importance as we focus on agriculture and added that water should be taken to distant areas using pipes instead of the current system of canals.

In the meeting, he also appealed bankers to be more amenable to funding road projects stating that 99 per cent of the projects stuck have been cleared by his ministry including through Cabinet decisions.

"Clearing stuck projects have helped the banks as otherwise over Rs 3 lakh crore of assets would have slipped into non-performing assets pile," said Gadkari. He also said that resources are not a worry for his ministry at present and added that expenditure is something which needs focus at present.

Works of over Rs 10 lakh crore have been awarded by his ministry and in the next two years, over one crore direct jobs will be created, he said. As part of the Sagarmala initiative, over 289 projects involving an investment of Rs 2.65 lakh crore have already been awarded, he added.