Tuesday, 19 August 2014

INDIA


TRUTH BEHIND OIL COMPANY'S LOSS IN INDIA
As i promised that next blog will be based on these days petrol price hike and its justification with more posibilities. I am back with my latest article on it, it took me little bit more time than i used to write an article,it was really tough and challenging topic to write on. Most of content referred is based on CAG report published by government of india every year though i read it not very much but whatever I read was quite interesting. So i mentioned everything here in considerable amount. It was hardly few days after Narendra Modi, the charismatic figure of “bhartiya janta party” commonly known as BJP, made BJP became first ever single party to win majority in polls.(though janta party also got majority in the past but it was made by bunch of parties and revolutionaries) But 2014 poll saw the lowest vote percentage of the party who won majority on ii's own( just 31.5%). I was just changing news channels as most of them were showing election reports of modi winning and its future etc.While doing it, i clicked a very prestigious channel running some discussion on oil crisis in india.Though i was aware of oil crisis in india through news papers but i never thought that there is some kind of loop hole there. I will tell you that later in this blog.After my last blog, i was just wondering what should be on my next post,somehow thought of writing an article came in to my mind because of that news channel's discussion on following topic.through that discussion i came to know that in CAG report ,It was written that oil companies who get subsidy for their well known economic loss on selling oil in the market at indian price( regulated by government of india before last few years ,now be regulated by oil companies), are creating confusions on this in the people,actually oil companies get a whopping earning on the basis of oil refining and selling .Actually the loss of oil companies is relative to what they would earn,if they sell same oil in international market.For this we can take an example that these company generally refine it and manufacture it at 50 rupees per litre and sell it at 80 rupees which is 100 rupees worth in international market.So they show loss of 20 rupees to government but actually they are earning 30 rupees per litre.It is not that these oil companies are doing some fraudlent ,actually it is the way of company's calculation of their loss. So, it is not that government would be doing it for anyone else's recovery of loss rather giving it to companies as their valid international compensation.But in
some way, as most of oil companies are government undertaking,Thus , Government is making illusion of spending money by giving subsidy to them.Also corruption has played the pivotal roe in this regard.some private companies(mukesh ambani's reliance industries) are using these subsidies as their backup,recently ONGC filed a law suit against R.I.L. for ten thousand crores which are supposed to be earned by government of india in the period given to R.I.L. to refine and mining of crude oil through R.I.L..Actually government had signed a deal with R.I.L. , giving them tender of refining and mining crude oil and natural gas from K.G. Basin of godawari and an island near bombay coast in order to earn a fixed percantage of revenue and was given a certain rate at which they had to sell oil to people but it was understood by authorities that they are not doing tha same that they were directed to do after getting tender. It turned out that they were not dealing it with standard prize which led ONGC in to 10 thousand rupees defecit.Also India is having one of most populated consumer base for crude oil.India still end up importing most of crude oil to be consumed in india even today.....
though it is very bad example of our media advertisement too that in media, most of the times, you will find out that they will always say that government has increased the rate to compensate oil companies losses, but actually it is not the full picture as i told you in the above that they(losses) are just relative.So, oil company's claim of always increasing rates to compensate their loss can be negotiated by government for some time to get time for government to invest in other sectors to raise or grow the other sectors.It is also true that governments are really doing it in the proper way
as they are increasing rates at slow rate but sometimes people claim it reasonable to increase increase the rate by a good amount to get rid of increasing price for months and use the time to focus on other sectors. it is also reasonable also because increasing prices of oil periodically creates political problems for government( mostly allies government's) does not let government focus on other sectors of importance which are needed to be taken care or improved.
Now it is time to conclude my blog with the hope that you would be liking it.Please do give feedback. To give feedback just comment in the inbox.Next time most probably my blog will be based on a phenomenal artist who was notably the most symbolic figure for last two decades of 20th century whose 56th birth anniversary will be celebrated on coming 29th august.Yes, my next blog will be on “Michael jackson” ( different from blog's theme) as a tribute to him..........

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