Category: Pricing Policies & Subsidies

G7 needs to recognise that actions that restrict flow of goods and services are bound to be counter-productive In a bid to punish Russia for its military action against Ukraine, leaders of G7 viz., the United States, Germany, France, Britain, Italy, Canada and Japan in June this year vowed to explore the feasibility of measures to bar imports of Russian oil above a certain level. In September, 2022, their finance ministers (FMs) said: “They confirm our joint political intention to finalise and implement a comprehensive prohibition of services, which enable maritime transportation of Russian-origin crude oil and petroleum products globally. Providing those services would only be allowed if the oil and petroleum products are purchased at or below a price...

For six months the prices of petrol, diesel have remained unchanged, resulting in heavy losses for refiners Ever since the start of the Ukraine war in February 2022, the international price of oil has been on the boil. Considering that India imports 85 per cent of its oil requirements, this is bound to impact the domestic price of petroleum products (POL). But the Modi government has ensured that the retail price of petrol and diesel have remained unchanged for a record six months. Around 90 per cent of the domestic fuel retail network in the country is controlled by the three Central public sector undertakings (CPSUs) namely, Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum...

The rising cost of natural gas has become a new challenge for key sectors such as fertiliser and power Faced with steep rise in the international prices of natural gas or NG triggered by Ukraine war and disruption in global supplies, and its attendant impact on cost of energy to industries across several sectors especially most sensitive ones such as fertilizers, power, etc., the Ministry of Petroleum and Natural Gas (MPNG) has set up a committee under Dr Kirit Parikh to review the current pricing formula for domestically-produced NG. Out of 54.6 billion cubic meter or bcm consumed in the country, nearly 50 per cent is met from imports such as liquefied natural gas or LNG. Mandated to restructure the...

The European Union and other western countries still believe that sanctions could be substitute for military strength despite paying heavy economic costs Faced with steep increases in the price of oil and natural gas or NG, the leaders of the Group of Seven industrial powers or G-7 viz., the United States, Germany, France, Britain, Italy, Canada and Japan have pledged to put in place a system designed to cap the income of Russia from sale of these products. The move has come in the back of the price of NG on September 4, 2022 being 400 per cent more than last year, while on the following day there was a further 30 per cent hike, courtesy the ‘Nord Stream’ shock...

The Govt should focus on reducing price (sans subsidy) by cutting import dependence, fostering competition by involving private entities and bringing it under GST The recent spurt in the price of LPG in the wake of Ukraine crisis has triggered a demand for resurrection of subsidy which the Narendra Modi government had stopped depositing in beneficiary’s accounts since June, 2020. Is the demand justified? By definition, subsidy on purchase of any given product is subvention or financial assistance provided by the state to a certain class of persons who cannot afford to pay the market-based or cost-plus price from their limited income. In case of LPG, the current price of a 14.2 kg cylinder is around Rs 2000 (in Delhi)....