Monday, July 10, 2006

Are Oil companies to blame for rising Petrol prices?

Gas prices have been close to and above the $3.00 mark since March, and I haven't found a credible reason for it yet. Of course, there seems to be a supply shortage, but why? The Government of India raised Petrol and Diesel prices in June, and Veeresh Malik seems to be confused about who to blame for the rising oil prices. He states that Indian Oil did not respond to enquiries about prices, and that is somehow linked to private oil companies' greed. Indian Oil is a state owned company. Even the example of Indian Railways he uses is that of state inefficiency. Gas prices in India are controlled by the state, and private oil companies can only use the prices that are set by the government. Mr.Malik seems to be talking about price gouging even without having his facts about the case in order. He even states that the amount of money spent on taxing oil at different levels would be sufficient to sustain a few states.
If the oil companies collect tolls for building highways, why should they give the money to the government? I like the conclusion that the petroleum ministry is also the answer to this. But are they listening?
Read his article here.


Ali Hasanain said...

We have the same problem in Pakistan, of course...

On the one hand, I'm symapathetic to the oil companies when they raise prices (and get criticized heavily) when world prices go up. Pakistan (and India if I'm not mistaken) are both largely importers of energy, so following world prices is expected.

On the other hand, both state involvement and the oligopolistic nature of the industry leaves a lot to be desired.

When I was in Pakistan in December, I was standing in a line of about 20 cars getting Compressed Natural Gas (CNG) filled up, while the diesel and gasoline lines were empty. I went to the pump manager and asked him why they don't have more CNG stations and less of other fuels, and he said that the state regulates the pressure that we can build up in lines, so effectively, we aren't allowed to have more pumps.

Somehow, I think it also had something to do with the fact that there are just three gas stations in the vicinity...

Horn Please!! said...

I dont want to blame anybody, I just want to know where my money is going when I pay for fuel, parking charges, tolls, &c &c.

You a student again? Wow!!