Discussion in 'Hangout' started by bnzjon, Mar 1, 2011.
Simple solution is let us adopt US dollers as indian currency
Well, the alarming simplicity with which you just now solved the nation's financial problems, BOSS you should be in North/South Block, beside the FM.
Please don't take offences. Believe me, if things were so simple, then it would have been done long before.
Secondly, all the non-congress CMs making noise over this hike, why don't they remove the VAT on petroleum products like GOA has done. On an average 25-27% of the petrol price comprises VAT, which goes to the State Govt.
Goa government also introduced entry fee to outside vehicles entering Goa. This is a wise decision. So they some how compensating the loss of revenue due to reduction in petrol price.
As a layman, I have a couple of questions about the petrol price hike:
- The government says increasing petrol prices is the decision of OMC's (Oil Marketing Companie's) as petrol is now de-regulated and the government has no say in this matter anymore. If this is true then why did the OMC's not raise prices during election's? Now, we hear from government that prices will be partially rolled back. How is the government now able to reduce prices when petrol is de-regulated and price fixing is the independant decision of OMC's and government has no say in this matter?!
- The government says subsidy bill is going out of control as they have to compensate the OMC's for keeping fuel cheaper. With falling rupee, Government is spending more to pay for subsidies. The government, by it's own admission said that they only subsidise diesel , LPG and kerosene. Since petrol was de-regulated, OMC's now bear any loss made on petrol. Now, how will increasing petrol price reduce the government's subsidy burden!?!
The reality is different from theory.
Yes petrol prices are de-regulated. But the oil companies cannot take a decision on their own when increasing prices. That's called realpolitik. You stop them from increasing prices when it's not politically right to do so and when the prices are increased, the burden is put on others. The oil companies have to toe the Govt line.
The Government provides oil bonds to the Oil companies in-lieu of subsidies. Here it must be noted that there is no actual cash transfer. The oil bonds worth xxx crores show up on the balance sheet of oil companies which enable them to show a healthy financial outlook - which is a MUST in today's global environment of competition. All that the Oil companies recieve is interest from these oil bonds.
At the surface it appears the oil companies are free to do as they like. Beneath the surface, nothing much has changed.
did you see this?
Business Line : Companies News : BPCL profit up over four-fold in Q4, declares 1:1 bonus
BPCL has a record profit of over 300% this fiscal and still they say the company cant survive without price hike !!!
Also the price of crude is at a low 90$ a barrel... What are they upto... for how long they can fool people like this?
That is exactly my point.
The government keeps saying one thing and then goes and contradicts that statement in few hours and no body realises this? What amazes me is that all the hot shot journo's had debates for over an hour and not a single journo asked the 2 questions that I have asked as layman.
Overpriced fuel is the main source of income for government. That is the reason they protect the oil companies interests.
That is exactly the point, Gurjinder.
The whole thing has been framed to fool the general public.
I think every one knows it and the whole system is trying to put the issues under the carpet.
---------- Post added at 01:03 PM ---------- Previous post was at 11:39 AM ----------
I would like to add on that : It is the most reliable and easy source of income for the government.
This is the real point. The Oil companies show huge profit with these oil bonds, but in reality they are like the guy with Acres of prime real estate but with little cash in hand. In theory he is very rich, but has difficulty running his day to day life.
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