Monday, May 29, 2006
Would like to comment something on the National Common Minimum Programme- the NCMP - a declaration of policies that the UPA govt would follow over its five- year rule.
One of the most- touted declarations of the NCMP is that the Navratna PSUs- Public Sector Undertakings- would never be disinvested into, but rather their profitability will be increased. Some of these Navratnas are oil sector giants like ONGC, IOC, BPCL, HPCL, IBP.... With the current hyperinflation in the international crude oil market, it is apparent that domestic fuel prices have to rise, which has not happened.... so IBP is already turning sick, IOC, BPCL, HPCL will be turning sick within a year. Just to remind everybody that these companies were in Fortune magazine's list of 500 best- managed companies in the world - till last year. So what's going wrong here?
The answer: when international crude oil prices have risen to astronomical proportions, the Left - which boasts of some of the most learned politicians in the country- has not let domestic prices increase, and Mr. Chidambaram - and the UPA govt ('esteemed' PM!)- have been impotently bowing down to the demands of their allies. In the process, they have ended up spoiling the jewels in their own crown.
Remember, crude oil needs to be bought in the international market, then processed, refined.... which will then give us the petrol we need to run our cars, the LPG we need cook food. This implies that domestic fuel prices will have to be hiked by a higher proportion, or at least by an equal amount, to keep these PSUs running. But instead the govt cuts duties on fuel, thereby hurting producers like ONGC.
Remember also that our shameless Finance minister does not flinch when imposing cesses on fuel prices and other commodities to finance the populist schemes of the govt - thereby siphoning off the money that should legitimately go to oil producers and suppliers.
Sometime back I received a mail stating that if all Indians would refuse to buy fuel for even one day, these oil companies would choke up on their inventories. They would choke up alright... and choke up so bad that they won't ever be able to rise again....
We would then have only ourselves to blame if the business of oil in India went into the hands of MNCs like Shell, and ChevronTexaco. Also think of the unemployment this would generate..... is somebody reminded of the Bombay mill movement of the 70s?
To all and sundry, I would like to appeal to not fall for such shams. Price rise is only a natural process..... only then can the thirst for oil be contained and/or non-conventional sources of fuels be discovered.
Coming to non-conventional sources, a Coal India Limited ex-director had said sometime back that crude oil can be extracted from coal, and this is known since the 70s. But at that time, this process was considerably costlier, and the returns lower. According to this ex-director, that process will now be affordable, and if implemented now, India can become one of the largest producers of crude oil in the world! But if we keep on pushing oil companies into losses, they will never invest in R&D, and consequently, we will be losing an opportunity to make the most out of this situation......
One of the most- touted declarations of the NCMP is that the Navratna PSUs- Public Sector Undertakings- would never be disinvested into, but rather their profitability will be increased. Some of these Navratnas are oil sector giants like ONGC, IOC, BPCL, HPCL, IBP.... With the current hyperinflation in the international crude oil market, it is apparent that domestic fuel prices have to rise, which has not happened.... so IBP is already turning sick, IOC, BPCL, HPCL will be turning sick within a year. Just to remind everybody that these companies were in Fortune magazine's list of 500 best- managed companies in the world - till last year. So what's going wrong here?
The answer: when international crude oil prices have risen to astronomical proportions, the Left - which boasts of some of the most learned politicians in the country- has not let domestic prices increase, and Mr. Chidambaram - and the UPA govt ('esteemed' PM!)- have been impotently bowing down to the demands of their allies. In the process, they have ended up spoiling the jewels in their own crown.
Remember, crude oil needs to be bought in the international market, then processed, refined.... which will then give us the petrol we need to run our cars, the LPG we need cook food. This implies that domestic fuel prices will have to be hiked by a higher proportion, or at least by an equal amount, to keep these PSUs running. But instead the govt cuts duties on fuel, thereby hurting producers like ONGC.
Remember also that our shameless Finance minister does not flinch when imposing cesses on fuel prices and other commodities to finance the populist schemes of the govt - thereby siphoning off the money that should legitimately go to oil producers and suppliers.
Sometime back I received a mail stating that if all Indians would refuse to buy fuel for even one day, these oil companies would choke up on their inventories. They would choke up alright... and choke up so bad that they won't ever be able to rise again....
We would then have only ourselves to blame if the business of oil in India went into the hands of MNCs like Shell, and ChevronTexaco. Also think of the unemployment this would generate..... is somebody reminded of the Bombay mill movement of the 70s?
To all and sundry, I would like to appeal to not fall for such shams. Price rise is only a natural process..... only then can the thirst for oil be contained and/or non-conventional sources of fuels be discovered.
Coming to non-conventional sources, a Coal India Limited ex-director had said sometime back that crude oil can be extracted from coal, and this is known since the 70s. But at that time, this process was considerably costlier, and the returns lower. According to this ex-director, that process will now be affordable, and if implemented now, India can become one of the largest producers of crude oil in the world! But if we keep on pushing oil companies into losses, they will never invest in R&D, and consequently, we will be losing an opportunity to make the most out of this situation......
// posted by Sam J @ 10:06 pm 
Comments:
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Nice article
You are right Sanyam if Indian Govt. wanted the n thse PSU's would have been worlds most profit making organisations.
Agree with the idea of implementation of research work like coal there is another alternative named Jatropha Govt. should have considered this seriously but there lacklusture approach is costing us dear.
You are right Sanyam if Indian Govt. wanted the n thse PSU's would have been worlds most profit making organisations.
Agree with the idea of implementation of research work like coal there is another alternative named Jatropha Govt. should have considered this seriously but there lacklusture approach is costing us dear.
thank you gaurav, for that piece of info. I checked out Jatropha, and it really turns out to be a good alternative for crude oil. Will be coming out with a piece on that one next.
gosh sanyam...i never knew you had a blog...cool..and you dedicated the first post to me..am too overwhelmed...really..
keep blogging.
cheers!!
:)
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keep blogging.
cheers!!
:)
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