Rising crude oil prices

Its high time for our goverment of India to do something about the rising global oil prices. The oil barrel is hovering around 69$ per barrel in the market. Lets see why such a fuss is made over the crude oil prices in India and around the world.

As you all know, Indian economy is currently in a robust mode. The manufacturing sector has recorded a growth of 11.06% in the FY-05 compared to FY-04 at the same time. Now certainly, how do we drive the growth in this manufacturing sector not mentioning the agriculture and the IT sector. Of course, the input is needed to sustain these markets. The major input to any process is of course power. In india unfortunately more than 70% of the power generated is thermal. This has its toll on Indian reserves. Also crude oil is need for our ever growing population of the vechiles, the pharma industry, the burgeoning beauty and cosmetics industry and of course to the domestic in the form of kerosene and LPG.

Now we come to the worse part, India has to import 3/4ths of its oil requiremnt. Just imagine the rise in this commodity relate to the pricing. Currently due to the pressure from the left parties i.e the CPI CPM et al, the goverment has not increased the oil prices, meaning the oil companies which import these commodities like IOC ONGC BPCL HPCL wagera wagera have to bear upon the costs. For the first time IOC profits has ended in the red for the last quarter. The under-earnings have increased about 25000 crore rupees from 15000 to 40000 crore rupees in this current year. Why all this nonsense is happening. Lets consider a hypothetical situation. If the profit on one barrel of oil is 2$ i.e selling price - cost price = 2$, we if we import one million barrel per day, the profit is 2 million dollars to the oil companies. This figure is actually very small. Lets assume that the C.P of an oil barrel is 54$. So the giverment sells its at 56$. Now the prices of the oil have risen to 68$/barrel. Now the loss is 14$/barrel. Hence the overall loss is 14 million dollars. Instead of earing two million we loose 14 million just because of this rising crude oil prices. Now why not we just increase the price of the oil in India and compensate it?Lets see the argument of the left. The left says that 57% of the price is in tax. Now why don't the goverment cut the excise duty on the crude oil ergo reducing the oil prices. Why the goverment always wants to pass it on to the aam-junta?

Point well taken, problem in India has always been the implementation. The taxing in the India is in concurrent list, that is both the state and the centre can impose taxes. With the absence of proper implementation of VAT( about which i have mentioned in an earlier blog- please refer to archives) it is impossible to have a concurrent pricing in the states at this time. The goverment erstwhile has planned to divest stakes at the navaratna companies but again due to left assholes, it has to be shelved. Now instead of having a bull-run in the market, these healthy oil units are turning sick due to mindless propositions of our left friends.

We have the best leaders to rule our country at this time, Mr. Manmohan Singh who brought the revolutionary reform in 1991, Mr. Chidambaram and Mr. Montek singh Ahuliwalia. They are the pioneers when it comes to Indian economy. Now i really dunno what the left see that these people dun see. Its really high time for the so called lefts to molt their fake coats and really support the prime minister to take his decision. Just because one is a communist it doesnt mean that he should always hinder the development process. The current buzz word is market capitilization. Tell me, are we more communist than China or Russia? Look at the growth of these economies. India can very well over take the growth of these ecnomies if the architects of our Indian econom are allowed to carry on their work. For atleast one time, let the stupid politics need not interfere with the executive decisions.