Wednesday, June 28, 2006
The fuel fiasco
There were lot of rumblings in recent times about the fuel price hike. Almost this is roughtly 6th or 7 th time there has been a revision in the fuel prices and the fuels sprialled like anything. It was around Rs. 35-36 in 2004 and now it stands at 50. The major point which has been put forth for its act of "biting the bullet" is the international crude prices. With every increase in cents the government releases figures mentioning the losses or dip in the profit lines of the major oil companies [ or Navratnas ] and now one more term has been added in this band wagon. " The Under Recoveries" of the oil companies.
Though there has been varied arguements regarding whether this is unavoidable or a fiscal gameplan, the most obvious point to put up is the cost break up of the fuels. It would be surprising to know that oil prices is pretty low in countries like Pakistan,Nepal and Bangladesh irrespective of the value of the respective rupees, this amounts to direct conclusion that indian oil has been exorbhitantly taxed. the rought notion is that taxes amount's to roughly 60 percent of the oil sold. And for sure, Chidambaram and co can play a part and bring down the numerous excises,duties and taxes and in addition to it the local sales taxes. With the oil finance ministry tasted the money and especially chidambaram would never give up his share from excises and duties of the fues to have a dent from his kitty. As rightly pointed in frontline this amounts to parent safeguarding themselves by putting their wards in trouble....