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PETROLIUM PRICES

CA SUDHIR HALAKHANDI (PRACTICING CHARTERED ACCOUNTANT) (13196 Points)

04 January 2009

WHEN PRICES OF PTEROLIUM PRODUCTS HAVE TOUCHED THIER LOW IN WORLD MARKET WHY THE INDIAN PUBLIC IS BEARING THE BURDEN OF SO HIGH PRICE ?

WHY ?

- CA SUDHIR HALAKHANDI

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5 Replies

CMA.Devarajan Swaminathan (ACMA) (1067 Points)
Replied 04 January 2009

Hello Sudhir,

Good point. Actually when they announced the price cut to Rs 5, the Govt. was contemplating a cut of Rs10. (source general news channel)

But the talk is also that OPEC may keep cutting production till such time crude oil touches $60-$70 to a barrel, could be the reason for the wait.

Regards,

Devarajan

CMA.Devarajan Swaminathan (ACMA) (1067 Points)
Replied 04 January 2009

Sorry

"cut to Rs 5" should actually be "cut BY Rs 5"

regards,

Devarajan

Jeet Biswas (ACMA (in Service)) (5073 Points)
Replied 04 January 2009

IOCL, BPCL, HPCL & other petro retailing Co.s are making losses on the sale of Petro products & LPG since a long time. The Government compensates half of the losses resulting from its dictate to oil companies to not to raise fuel prices in line with cost, through issue of oil bonds. Even if u take the example of the July-Sep 08 Qtr, had it not been the oil bonds, these 3 Co.s wud hv posted multi crore losses. Moreover, in the 1st Qtr of 2008, these Co.s made a loss of 14431Cr together...

The Petroleum and Natural Gas Ministry was supposed 2 seek reduction of excise duty for petrol & diesel, by half. Lets see if that makes a difference...

CA SUDHIR HALAKHANDI (PRACTICING CHARTERED ACCOUNTANT) (13196 Points)
Replied 04 January 2009

IS IT NOT A TAX ON INDIAN PUBLIC?

Jeet Biswas (ACMA (in Service)) (5073 Points)
Replied 04 January 2009

Yes, but the economy is as we all knw, dependent upon the above mentioned Co.s and if they perpetually make losses...it will be a grave problem as well...

But a solution is certainly needed. hope the current global crude price gets settled thr & the prices in india are reduced...