Assembly elections in Assam, Kerala, Puducherry, Tamil Nadu and West Bengal are expected to be completed by May after which the government will take a call on hiking fuel prices
New Delhi: The government today hinted that petrol and diesel prices are unlikely to be hiked in haste, even though global crude oil prices continue to rule at the uncomfortable level of $110 a barrel, reports PTI.
State-run Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation currently sell petrol, a commodity which the government freed from its control in June last year, at a discount of about Rs4.50 a litre to its imported cost.
Diesel, whose price is still controlled by the government, is sold at a loss of Rs15.79 a litre or Rs283 crore per day.
"I think oil companies must be watching global markets, which is today characterised by unusual volatility. They will in good time take a view," oil minister S Jaipal Reddy told reporters here.
He was asked why the deregulated price of petrol has not moved in tandem with the international cost.
"As far as petrol is concerned, there is no doubt it is decontrolled... Oil companies must be watching global markets and will take studied decision (on raising prices)," he said.
On diesel, he said "it is too early" to call a meeting of the Empowered Group of Ministers (EGoM) headed by finance minister Pranab Mukherjee to decide on raising rates.
"Everybody is busy (with electioneering)... let us wait for some time," he said.
The basket of crude oil that India buys has averaged $110.61 per barrel this month as against $72-$73 a barrel at the time of the last revision in diesel prices in June 2010.
In all probability, petrol and diesel prices may not be hiked till assembly elections in Assam, Kerala, Puducherry, Tamil Nadu and West Bengal are completed in May.
"Since June, the oil companies have chewed up about Rs2,000 crore losses on selling petrol below cost. Rs400 crore is what these companies will lose in March alone," an industry official said.
The three firms had last hiked petrol price by Rs2.50 on 15th January. Since deregulation of rates in June, the rates have gone up about Rs7 per litre in five instalments to Rs58.37 per litre.
Besides petrol, the three retailers are losing a record Rs15.79 a litre on diesel, Rs24.74 per litre on kerosene and Rs297.80 per 14.2-kg LPG cylinder.
The three firms are losing cumulative Rs432 crore in revenue every day on selling diesel, domestic LPG and kerosene below cost, the official said.
"For the full fiscal, the three are projected to lose Rs78,061 crore in revenues at current prices," he said.
India is the world’s youngest democracy, but six decades after the republic was set up, it is high time the populace gets the governance it deserves. Our democracy has matured enough, but corruption is a deep-rooted malaise
Over a decade back, in 2000, on the occasion of the golden jubilee of the Indian Republic, then President KR Narayanan, quoted John Dryden, when he sternly warned that "Beware of the fury of the patient, long-suffering people." Dryden's saying equally applies to the Indian aam janata of today.
Even after 11 years down the line, in 2011, Dryden's sane warning has not yet driven home the message to our elected representatives, bureaucrats and business czars. The economic gains instead of trickling downwards to the underprivileged are being corned by the powers-that-be- with the rich growing richer, and the poor be damned!
Economist SS Tarapore, a former RBI deputy governor, rightly points out: "Given the large number of the poor in our country, a 6%-7% sustained growth with 3%-4% inflation would be preferable to a 9% growth with 9%-10% inflation."
But our GDP growth seems to be on track, but inflation shows no sign of abating.
During a hearing into the 2G spectrum case, the Supreme Court bench rightly remarked -"We have a large number of persons who think they are the law. The law must catch them. Post-liberalisation, globalisation and privatisation, the government is dragging its feet on getting back the black wealth stashed abroad, even when the Swiss authorities have come forward to furnish the wrongdoers' names, but it (the Centre) is busy organizing cover-ups. Never before has free India witnessed such serious charges of corruption and wrongdoings of rampant loot of precious national resources by those in authority involved in blatant cover-ups with plain untruths-even challenging the findings of constitutional bodies like the CAG (Comptroller and Auditor General) who have reported the spectrum fraud of Rs. 1.76 lakh crores and ISRO with Rs2 lakh crore."
However, the prime minister is not necessarily monetarily corrupt. History has it that the French, American and Russian Revolutions were caused when the peoples' power rose in full fury. The sub-prime crisis that caused the massive financial meltdown in the US brought about the state intervention via 'socialisation' into the heart of free market capitalism-the United States of America, when the free market professing US Administration/State perforce pumped in billions to bail out "stressed" banks and big businesses. This infection in turn hit hard Europe via the PIIGS (Portugal, Italy, Ireland, Greece and Spain) economies.
There is rise in unemployment, galloping inflation and growing bankruptcies all taking their economies into a spiral-and giving the European 'Union' a serious setback.
You could say: Mera Bharat mahaan, hum sub hai pareshaan kyo ki 99% hai beimaan! (Our country is great, but we are all helpless, because 99% are hopeless).
Our national Budgets get passed-without debates.
Charges of corruption are flying thick and fast, hardly reviving old issues and adding newer ones reaching the highest echelons-FIRs against former Union ministers, the State CM, two army and one navy chief -along with other top army brass involved in 'the Flats-for-Kargil' scam, the Commonwealth Games scandal… this is a very long list. A senior counsel, filing a PIL (public interest litigation) in the Supreme Court alleges that eight Chief Justices of India are corrupt.
Corporate bigwigs have been caught red-handed trying to stall further exposures citing "invasion of individual privacy" in the spectrum-for-sale scandal, when they themselves are found to blatantly infringe public space by jumping queues to corner spectrums.
They do not hesitate to perpetuate corruption via multi-crore corporate public relations lobbyists. They ship payments to corporate lobbyists to swing deals in their favour, and yet complain of 'sleepless nights' over demands of Rs15 crore for setting up a new domestic airline. The company failed to deposit the entry fee, furnish bank guarantees and sign licence agreements for which they sought and were given several extensions. Nobody challenges another corporate head when he publically pointed out that there is a definite nexus between business and politicians.
Swapan Dasgupta, a veteran political commentator, rightly says-"We don't have any opposition worth the name-the Congress has given the BJP a chance to go prowling for simple minded suckers. For its own sake, BJP has to ensure its mad caps are kept behind closed doors." WikiLeaks has exposed the Achilles heels of both the Congress and BJP in an equal manner, leaving both parties red-faced.
The Union agriculture minister says he is not responsible for the food inflation that is exceeding an all-time high of 15%-the onions, garlic and tomatoes are not on his platter! We also have a scam-tainted Chief Ombudsman, the Chief Vigilance Commissioner who claims that he is only charged with criminal conspiracy and not criminal acts! The brother and son-in-law of an ex-Chief Justice become millionaires during his term of office. He continues to enjoy his post-retirement office as Chairman of the National Human Rights Commission with all attendant perks.
Doctors and hospitals blatantly overcharge when they come to know that patients are reimbursed, forcing health insurers to unilaterally pull out of cashless health-cover, crying over losses that are bleeding them. World bodies are refusing to extend lines of credit. Public transport is creaking at its seams. Power shortages-unheard of earlier-have reached Mumbai's eastern suburbs. The local water, petrol and land mafia are operating freely. Food inflation has shot through the roof. Mumbai is adding to its billionaires and high-rise luxury apartments with in-house gyms, swimming pools and will soon add rooftop helipads. Neighboring Andhra Pradesh, Gujarat and Karnataka have overtaken Maharashtra, shaking overseas and domestic investors' confidence in the state administration.
While addressing state chief secretaries on 4 February 2011, Dr Manmohan Singh said - "Corruption strikes at the roots of good governance, it is an impediment to faster growth, it dilutes, if not negates efforts at social inclusion, dents our international image and demeans us before our own people. Inflation poses a serious threat to the growth momentum, it is mostly driven by supply-side shortages."
Speaking later at the 17th Commonwealth Law Conference, the PM demanded, "power of judicial review must never be used to erode the legitimate growth assigned to other branches."
At the same venue, the Chief Justice slammed the government on the issue of food security and lack of inclusive financial growth. At another conference in Mumbai Supreme Court Justice Ganguly asked how former Maharashtra CM Vilasrao Deshmukh has been allowed to continue as a minister in the Union Cabinet after he was rapped by the Supreme Court in December, terming his interference with the police from taking action against a Congress MLA-moneylender, his behavior being "anachronistic and incongruous" and the High Court fine of Rs25,000, which was subsequently enhanced to Rs10 lakh.
The Supreme Court had remarked that the CM's behaviour was condemnable as he had acted beyond all legal norms for political considerations despite the Vidarbha region having the dubious distinction of witnessing the largest number of farmer suicides. Considering the large volumes of scams/frauds, a Bengaluru-based Chartered Accountant has proposed a punitive tax to serve both as a deterrent and punishment by christening it a 'Sin Tax' on tobacco and alcohol, and another tax yet to be named, of a flat 40%-50% of the amount evaded on those who intentionally violate tax and forex laws instead of resorting to amnesty schemes.
A long time ago, what Lord Macaulay said of British politicians of his times aptly applies to our today's netas, that they are a blend of "Whatsoever things are false, whatsoever things are dishonest, whatsoever things are impure, whatsoever things are hateful, whatsoever things are of evil report, if there be any vice and if there be any infamy."
(This author is a chartered accountant and activist.)
The D1 and D3 fields have enough reserves to support peak output of 80 mmscmd. However, Reliance is not able to derive the entire volumes out as the gas is stored in isolated pools, which are not connected to each other
New Delhi: Reliance Industries (RIL) has not kept its commitment on drilling wells on the prolific eastern offshore KG-D6 field that has seen drastic fall in production, reports PTI quoting the Directorate General of Hydrocarbons (DGH).
RIL had committed to drill 22 wells on Dhirubhai-1 and 3 fields-the largest of 18 gas discoveries in the block KG-DWN-98/3 or KG-D6 block in Bay of Bengal-by April 2011 to produce 53.4 million metric standard cubic meters of gas per day (mmscmd).
Another 8-9 mmscmd output was to come from the MA oilfield in the same block, taking the total output committed in the Field Development Plan (FDP) to 61.88 mmscmd by April 2011.
Against this, it has so far drilled and completed 18 production wells on the D1 and D3 fields giving a combined output of about 42 mmscmd, DGH director general SK Srivastava said today.
Besides, two other wells have been drilled but have not connected to production system.
"It has to drill two more wells by April," he said but did not say what action the government or DGH can take if Reliance failed to honour its commitment.
Output from KG-D6 is to hit peak of 80 mmscmd by 2012-13 with Reliance drilling a total of 31 wells.
Oil minister S Jaipal Reddy also parried questions on what the government can contractually do if RIL defaults.
D1 and D3 gas fields and the MA oilfield currently produce about 50 mmscmd, lower than 61.5 mmscmd output the block had achieved in March 2010.
"This fall in the output of KG-D6 has been reported to us. Our DG, DGH is in contact with the operator (Reliance) of KG-D6... We do not know about the reasons for the fall... its technical issues. We are in correspondence with Reliance... we are in contact with them," Mr Reddy said.
Asked about the action the government can take against Reliance for not meeting its commitment, the minister said the question was "hypothetical". A well in deepwater takes up to six months to drilled and completed.
Reliance has projected that gas output from the D1 and D3 gas fields will fall further to 38 mmscmd in 2012-13.
In its annual work programme, submitted to upstream oil regulator DGH, Reliance has projected maintaining the current production levels during 2011-12 fiscal.
Reliance spokesperson could not be immediately contacted for comments.
D1 and D3, the largest of the 18 gas discoveries that Reliance and its 10% partner Niko Resources of Canada have made in the 7,645 square kilometre KG-D6 block, had touched 53-54 mmscmd of output in March last year but the production has fallen since.
"The fields have enough reserves to support peak output of 80 mmscmd. But what Reliance has now learnt is that the gas is stored in isolated pools, which are not connected to each other. It is not able to derive entire volumes out," an industry official said.
Some people argue that drilling more wells could solve the problem but Reliance has concluded that the cost of drilling, completing and connecting the well to the production system exceeds the economic value of the gas to be produced.
A solution to the problem may lie with London-based BP Plc, which is buying 30% stake of Reliance in 23 oil and gas blocks including KG-D6, for $7.2 billion.
"BP has faced similar issues around the world and its expertise will help Reliance overcome the problem," he said.
Reliance does not propose to drill more wells on D1 and D3 unless it has BP on board and the drilling plans are vetted.
Officials said Reliance has projected crude oil output from the MA field in the same block to fall to 12,050 barrels per day (bpd) in 2012-13 from about 17,000 bpd current production.
Reliance at present sells 14 mmscmd of gas from KG-D6 to fertiliser plants, 24 mmscmd to power plants and the remaining 13 mmscmd to other sectors like sponge iron plants, LPG, city gas distribution (CGD), petrochemical plants and refineries.
The gas producer has so far made 18 gas and one oil find in KG-D6, which it won in consortia with Niko under the first round of the New Exploration Licensing Policy (NELP) in 2000.
Of these, two gas (D1 and D3) and one oil (MA) discovery have been put on production. D1 and D3 commenced output from 1 April, 2009, while MA started production from 17 September 2008.
Reliance has been forced to restrict production from the MA oil field to about 17,000 bpd due to high water and gas output, sources said, adding that the field was yielding more water than oil and that even 8 mmscmd of gas in comparison to oil output was considered quite high. The MA field had five oil producing wells and one gas producer.
Furthermore, four gas discoveries have been declared commercially viable, while the Field Development Plan (FDP) for nine satellite finds was submitted on 14 July 2008 for approval.
The FDP for the nine satellite fields was not found techno-economically viable and Reliance submitted an Optimised FDP (OFDP) for four of these nine satellite fields on 29 December 2009. The OFDP is under evaluation by the DGH.
One discovery is under appraisal and Reliance has so far not submitted a declaration on the commercial viability of two other finds.