Oil Oil Oil

Chain mails and forwards do not usually mean much to me. It’s usually open – smile - forward for nice ones and open – delete for the others. But this one warranted special attention. This one blamed the rising oil prices on the companies.

Hi everybody,

Petrol in Pakistan Rs 17 per liter

Malaysia Rs 18 per liter
In India it's 51 per liter

Why this difference in Asia itself? World Market CRUDE Oil is not the reason for this. It's all Gain for private owners. As we are the general public, or Common Man as R.K.Laxman wud have said, we have to raise our voice, let's rise thru Emails.

Forward this to all Indians who care.

IT HAS BEEN CALCULATED THAT IF EVERYONE DID NOT PURCHASE A DROP OF PETROL FOR ONE DAY AND ALL AT THE SAME TIME, THE OIL COMPANIES WOULD CHOKE ON THEIR STOCKPILES.

AT THE SAME TIME IT WOULD HIT THE ENTIRE INDUSTRY WITH A NET LOSS OVER 4.6 BILLION DOLLARS WHICH AFFECTS THE BOTTOM LINES OF THE OIL COMPANIES.

THEREFORE "24th JANUARY" HAS BEEN FORMALLY DECLARED "STICK IT UP THEIR BEHIND "DAY AND THE PEOPLE OF THIS NATION SHOULD NOT BUY A SINGLE DROP OF PETROL THAT DAY.

THE ONLY WAY THIS CAN BE DONE IS IF YOU FORWARD THIS E-MAIL TO AS MANY PEOPLE AS YOU CAN AND AS QUICKLY AS YOU CAN TO GET THE WORD OUT. WAITING ON THE GOVERNMENT TO STEP IN AND CONTROL THE PRICES IS NOT GOING TO HAPPEN. WHAT HAPPENED TO THE REDUCTION AND CONTROL IN PRICES THAT THE ARAB NATIONS PROMISED TWO WEEKS AGO?

REMEMBER ONE THING, NOT ONLY IS THE PRICE OF PETROL GOING UP BUT AT THE SAME TIME AIRLINES ARE FORCED TO RAISE THEIR PRICES,
TRUCKING COMPANIES ARE FORCED TO RAISE THEIR PRICES WHICH AFFECTS PRICES ON EVERYTHING THAT IS SHIPPED. THINGS LIKE FOOD, CLOTHING, BUILDING SUPPLIES MEDICAL SUPPLIES ETC. WHO PAYS IN THE END? WE DO!

WE CAN MAKE A DIFFERENCE.IF THEY DON'T GET THE MESSAGE AFTER ONE DAY, WE WILL DO IT AGAIN AND AGAIN. SO DO YOUR PART AND SPREAD THE WORD. FORWARD THIS EMAIL TO EVERYONE YOU KNOW. MARK YOUR CALENDARS AND MAKE 24 JANUARY A DAY THAT THE CITIZENS SAY "ENOUGH IS ENOUGH".

We forward so many junk email to many of our friends, now let us do it for some useful cause to cut down the price of the petrol........

REMEMBER: JANUARY 24, 2008.... NO Petrol Day...!
Please "Think Of It ...............

Oil pricing has always been a sensitive issue. When I got this mail, the first thing I checked for was its veracity. Luckily, someone had taken the initiative and made a comparison of oil prices. And btw, the price of petrol in Pakistan is not Rs.17, its Rs.43. There are many other countries that pay much higher than India does. And there are reasons why countries like Malaysia have low prices. But we’ll come to all that in Due course.

*Look here also to know about the real prices in Asia

India imports most of her crude oil. And with the global crude oil prices touching $100/barrel, it’s inevitable that we pay more for our petrol. The government of India is maintaining the prices at the level currently available to us only by subsidizing the product. But for each liter of petrol, half the money is for the taxes. An oil company in India makes about Rs 8 loss/liter they sell. Petrol is being sold at a loss of Rs 8.74 a liter, diesel at Rs 9.92 per liter, kerosene Rs 20.53 a liter and LPG at a loss of Rs 256.35 per cylinder. (Source) Without the price hike, oil companies would suffer a revenue loss of about Rs.75,000 crore in one year! Their condition is so bad that if they do not get enough money via bonds or from the government, they will go into the red and be forced to shut down their refineries. Can you imagine the impact it will have on our country!

* (The prices touched on January 2, 2008. It also reached that peak during intraday trading on January 3, 2008)

*Also read “Raise fuel prices or sell the PSUs”

So if we are not paying to the companies for the petrol and the diesel, where is all the money going? The Times of India printed this table in their Bangalore edition on January 13,2008. (I guess with the data about the breakup from the link above)

----------------------------------Petrol--------- Diesel
Price paid to the refinery --20.38---------23.50
Inland freight----------------- 0.68 ---------0.74
Marketing cost ---------------0.57 --------- 0.57
Return on capital ------------0.67 --------- 0.63
Excise duty -------------------14.66 ---------4.69
Sales tax ----------------------- 7.26 ---------3.39
Dealer commission ---------- 1.02--------- 0.60
Oil marketing Cos. ---------( -1.72) -------- ( -3.64)
under-recoveries

Retail selling price * --------43.52--------- 30.48
* In Delhi

More than half of the amount is due to various taxes. So I guess one way would be to change the amount levied on each liter. But if that’s really viable is something I don’t really know. Subsidies are making the pinch in the pocket lesser, but it may not be really feasible to continue with the current prices.

And to answer the question about the pricing differences in Malaysia, Pakistan and India - Malaysia is an oil producing country. And Pakistan uses its gas reserves, which btw is the 6^th largest in the world in addition to the oil it uses.

So instead of just blaming companies, what we should look at is reducing the taxes on these to some extent and work some way out. I do support the initiative to reduce petrol consumption, but I don’t agree with the statements that this is because of money going to the oil companies.

One more thing, if there really is a day when you know there won't be petrol, do you really think people would just walk or something? Hello no, we'd all just fill up the tanks and stock up!

P.S. The reason for the increase in crude oil prices over the world has been explained beautifully by the BBC here.

P.P.S To those who actually read the whole thing, whoa! Thanks!