The Oil Slick Ahead ; Global Crude Oil Rates Notwithstanding, Taxes Account for a Major Chunk of Retail Fuel Prices in India
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Summary
Don't celebrate the recent fall in crude oil prices-as yet. As it turns out, we haven't been billed for the flare-up in global crude prices in the past six months. The arrangement that insulated consumers from a price hike so far-distributing the burden of higher crude prices between the government and oil companies-has reached a dead end. For some weeks now, Petroleum Minister Mani Shankar Aiyar has been working with the Finance Ministry and the Left parties to end the deadlock, but an increase in the prices of some or all petroleum products seems imminent.
Oil marketing companies claim they are the worst victims of the indecision on pricing. Even after the recent fall, global crude prices are 20-30 per cent higher than their November 2004 level- when domestic petroleum prices were last revised. The inability of oil companies to pass on higher crude prices to consumers has dented their profitability (see table). This at a time when they are investing an estimated Rs 38,000 crore on fuel upgradation to meet the fuel quality norms set by the Supreme Court.See the full content of this document
Extract
The Oil Slick Ahead ; Global Crude Oil Rates Notwithstanding, Taxes Account for a Major Chunk of Retail Fuel Prices in India
The companies claim that the retail price of petrol and diesel should go up by Rs 4-5 a litre, the price of kerosene by Rs 11.05 (current price Rs 9.01) and that of LPG by Rs 210 a cylinder (current price 281.60...
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