Automobile owners can afford to pay higher prices for fuel, Union Minister KJ Alphons said on Saturday, drawing sharp criticism across nation.

"So we are going to tax people who can afford to pay. Somebody who has a car, bike; certainly he is not starving. Somebody who can afford to pay, has to pay," the union tourism minister said.

Mr Alphons comments come at a time when petrol and diesel prices in India are highest in the world despite international crude prices declining by 50 per cent over the last three years.

The minister added the money collected by the government wasn't getting stolen as used to happen during the previous Congress-led UPA coalition's tenure but was going into improving the life of the poor.

"Prime Minister has a huge dream for the poor of India. What is that dream? It is very simple. 30 per cent of Indians go to bed without a full meal a day. Lot of our people do not have access to toilet. Lot of people do not have a house," he said.

Former petroleum minister M Veerappa Moily called Alphons' defence of high prices as an atrocious and insensitive statement.

"This is how bureaucrats, who come to politics, have no understanding of people's problems. Many of the ministers in PM Modi's government are like this," Mr Moily said.

This week, the Congress spokesman Manish Tiwari had asked if the central government qualified for the label of an "economic terrorist", a term that he claimed was used by the BJP when the Congress was in power for raising fuel prices.