Oil pool deficit touches 80 bn - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Oil pool deficit touches 80 bn

Mar 3, 2000

The oil pool deficit has touched Rs 80 bn and at this rate of growth could easily touch a level of Rs 300 bn annually. This is primarily due to the fact that while the internationally oil prices have been risen to $30 a barrel the prices of the five regulated products has not been increased. The five products are LPG, diesel, petrol, air turbine fuel and kerosene.

As per a Cabinet decision these prices would be pegged to the international oil prices and raised accordingly. However, the last major hike in prices took place when diesel prices were hiked in October 1999.

This sparked off protests, which lead to the transporters strike. Another hike now would be politically explosive apart from fueling further inflationary pressures in the economy.

A long term solution to this problem is imperative since despite the prices being pegged to international prices the government is finding it difficult to increase prices. This solution could only be in the form of deregulating these prices and allowing the oil companies to fix a price for these commodities.

The impact on the margins of the refinery companies is equally adverse. While the companies are paying the international prices for these products they have not been allowed to increase end product prices. Though the reduction in the import duty of crude from 20% to 15% would provide some relief it would not be enough to save refining companies’ bottomlines over the medium term.

Equitymaster requests your view! Post a comment on "Oil pool deficit touches 80 bn". Click here!

  

More Views on News

5 Green Energy Stocks to Watch as India Readies for a Revolution (Views On News)

Oct 13, 2021

The excitement around green energy stocks has opened up a huge contrarian opportunity in the traditional energy space.

Top Performing PSU Stocks over the Past One Year (Views On News)

Oct 1, 2021

After a decade of underperformance, PSU stocks have woken up. Here are the best performing PSUs of past twelve months.

Linde India Shares Hits New High. Up 230%+ in One Year (Views On News)

Aug 26, 2021

Linde India shares have surged sharply in the past few trading sessions. What's causing the rally?

ONGC Logs Massive Jump in Net Profit as Crude Oil Prices Double (Views On News)

Aug 16, 2021

Rising crude oil prices compensate ONGC's fall in production.

HPCL Shares Under Pressure After Profit Declines in June Quarter (Views On News)

Aug 5, 2021

Rising crude oil prices and forex woes weigh on HPCL's quarterly numbers.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

Don't Sell these Stocks if the Market Falls (Profit Hunter)

Nov 17, 2021

These are the 3 types of stocks that you should not sell in a market crash.

How to Find Your Next 10-Bagger in this Market (Profit Hunter)

Nov 19, 2021

The #1 make or break factor in your portfolio you shouldn't ignore.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE OIL & GAS


Nov 29, 2021 (Close)

S&P BSE OIL & GAS 5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS