OILs NOT WELL

Just as we have the cartel called OPEC or Organisation of Petroleum Exporting Countries, we need to have a cartel of the OPCC or the Organisation of Petroleum Consuming Countries. Thereafter, each country should take some measures to curb the consumption of Petrol and Diesel however small. It could be rationing a fixed quantity per vehicle on a per day basis, run vehicles on alternate days with odd and even registration number plates, encourage pool car systems, make ethanol dosage in fuels compulsory and hike it wherever it is already working. Don't believe in the US propaganda that this will lead to food shortage as America makes ethanol out of corn whilst mostly others make it out of sugarcane and sugar is not food but a sweetening agent.

Today's crisis had been coming for many years when experts have been warning us that whilst consumption of oil was going up the proportionate increase in production of oil was not taking place at all. With cheap oil our usage habits have become bad and wasteful which continues even now. Resistance to change is a global phenomenon but we have to bite the bullet or face worse days ahead. China being a totalitarian regime can start rationing immediately whilst India can go in for Demand Management which envisages release of Petrol and Diesel to petrol pumps as per their historical performance over the same period in the previous year. US citizens can go for voluntary cuts on their own extravagance. These measures of the OPCC nations will yield immediate short-term gains whilst they try to step up their own oil or alternative fuel production for gains over the long term.

Instead of OPEC making us dance as we are now doing soon the OPCC can make the OPEC dance for a change as they keep reminding us that the present spike in prices is solely demand driven mainly from China and India. It could even break OPEC’s fragile unity as they will scramble to increase sales in a falling market.

There are many hidden elements included in the price of Indian petroleum which are decades old. Like the Gulf surcharge which was included and never withdrawn during the Gulf War!! All taxes or levies and cost input elements are ad-valorem instead of based on specific amounts so that when one element goes up all the others also go up on the percentile basis. Another daylight robbery is the Kerosene scene. Out of the 10 million metric tones (mmt) yearly subsidized "poor mans'" fuel, 7 mmt is given to city based ration card holders. How many people do you personally know living in cities that use Kerosene for cooking or lighting purposes? They all use the highly subsidized LPG for cooking and electricity for lighting. Yet the entire quantity 7 mmt of Kerosene is lifted by PDS (public distribution system-ration shops) dealers every week/month. Where does it all go? It sells for around Rs. 9 per liter when it actually costs the country around Rs.37 to import, the balance being subsidized at our cost. It goes straight into the storage tanks of petrol pumps to mix with petrol/diesel that you and I buy for above Rs. 50 & 40 per liter. See the margin of profit? Is it all pocketed by the Oil company dealers with nothing going to those who have kept up this robbery through successive governments?

Go to any village and see at what price Kerosene sells. It is sold in the black market and in 650 ml bottles passed off as 1 liter if at all it is available after its diversion to the petrol pumps. Both Kerosene and LPG subsidy amounts are more than the price at which they are sold today. 60 percent of petrol is used by Govt. departments and their families. "Free" electricity for "poor" farmers is meant for rich MPs and Ministers or the Kulak lobby who have also kept agriculture income out of the purview of income tax for their sole benefit. How many "poor" farmers can afford to buy deep tube wells or pump sets that are used for irrigating large tracts of land? The same lobby benefits from the fertilizer subsidy also. Get the picture? But every political party promises this wasteful expenditure because the moment any party in power that does not implement this, all the others in the opposition begin to criticize this move as “anti-farmer” which also gets a lot of free media attention and paints a negative picture of that party and turns them into villains for being against the “poor farmer” which Deve Gowda keeps calling himself!