The Falling Rupee And Soaring Fuel Prices Giving People A Feeling of Déjà Vu!

The falling rupee and soaring fuel prices remind many people of 2013. But things might not be as bad

- Soumik Dey

Thanks to a free-falling rupee and spiralling fuel prices, many people are having a feeling of déjà vu. The situation today, in more ways than one, looks similar to 2013, when the BJP, then the main opposition party, joined hands with the left parties to protest the high fuel prices. Prime Minister Narendra Modi, who was then Gujarat chief minister, called the jump in petrol prices the “prime example of the failure of the Congress-led UPA”.

Curiously, the Modi government’s response to the current situation has been quite similar to the Manmohan Singh government’s response at that time. “The prices of petrol and diesel are rising due to the double impact of the rise in crude oil prices and devaluation of the rupee,” said Subhash Chandra Garg, secretary, department of economic affairs. Manmohan Singh’s finance minister P. Chidambaram had the same defence in 2013.

Earlier this year, however, Chidambaram had suggested that petrol prices could be cut by 25 a litre by the Central government. Back in 2013, the UPA government was battling higher crude oil prices—$130 a barrel, compared with $82 today— but had allowed under-recoveries by oil marketing companies up to 10 a litre. Though it checked the rise in retail fuel prices, it further widened the government’s deficits and weakened India’s ratings.