Build your professional network on facebook via our app Go to app
 
 
 

Are higher oil prices necessary for fiscal consolidation?

Created by : Esha Johar, Risk Analyst, Irevna  | 06 28 2010 11:00:00 +0000
Industry : Oil & GasFunctional Area : India(Markets)
Keywords : fiscal consolidation oil price rise higher oil price
Activity:  228 views;  last activity : 07 09 2010 04:56:10 +0000

Late last week, the Union government began the process of getting the oil pricing act right. After months of debate and policy paralysis, it took the first step towards market determination of key refined oil products.

http://www.paisawaisa.com/community/pressrelease/pressreleaseImages/1337771223337771223313377712233377712233.jpg

Under the new arrangements, announced on Friday, petrol prices will be decontrolled totally and will be market determined. This decontrol will take place both at the factory gate and at the retail level. Diesel prices, too, will be decontrolled steadily. For the time being, the price of diesel has been increased by Rs2 per litre. Liquefied petroleum gas and kerosene prices, probably the most sensitive politically among all petroleum products, too, have been increased.

So I would like to ask you all, are higher oil prices necessary for fiscal consolidation?

  
 Refer 473
Share
 
 
  Rate : 
 
 
Yes Vs No
14
 
 
 
 
5
6
5
Support   Support
 
0
0
The amount Govt. pay for subsidy is very high so it should be removed from oil prices but to control the price central Govt. and state Govt. should work together and cut the higer sales tax to the normal.
By Rajesh Kumar Thakur, Regional Sales & Marketing Manager, E G Gas Limited  | 07 09 2010 04:56:09 +0000
0
0

I think it is about time we freed ourselves from oil subsidy web and pay what everyone pays in the world
By Rajeev N.Bhatt, Equity Trader, self employed  | 06 29 2010 04:57:24 +0000
0
0

thnx isha to refer me this topic.i think it is necessary.
By Dr.Narendra Bahadur Singh, Sr REPORTER, TRIGUT HINDI DANIK NEWS PAPER  | 06 28 2010 19:33:55 +0000
0
0
Ye some how we have to mange the fiscal deficit and we have to minimise the oil pool loss so its betetr to give market mechanism but considering pDs system should be strong
By Vivekanand , Senior Consultant (Economic & Rural Research) SAARC Nations, United Nations Development Programme  | 06 28 2010 11:16:45 +0000
0
0
Yes agreed with you Esha
By Nitin M Aras, Head/VP/GM-Tech. Support, ODTIN Food Solutions Pvt Ltd  | 06 28 2010 11:16:16 +0000
0
0

The economic case for market determination of these prices has always been strong. Oil is an exhaustible and non- renewable resource. As such, there is a strong case to tax it properly to reflect its consumption and non-availability for future generations. There have been noises that government should reduce the excise component of these taxes on oil. That is a bad argument. The government has to have some revenue if it is to provide basic services.
By Esha Johar, Risk Analyst, Irevna  | 06 28 2010 11:00:00 +0000
0
0
I do not think so. Government is not keeping any transperency on the reasons behind price hike. On the one hand Government declares that the subsidies are being given to Oil Companies to meet the losses they incur on the other hand when we see their B/S their profits are increased substantially to about 2/3 times. Hence unless and until there is a transperancy we Indians should not allow for such unreasonable increase.
By Sanjeev Bhandarkar, Regional Commercial Manager, Bharti Teletech Limited  | 07 08 2010 11:32:34 +0000
0
0
Decrease the taxation component on petroleum and its products. then government need not subsidise it and the prices can be halved. the aims of fiscal consolidation and reducing fiscal deficit as well as controlling inflation will be achieved in one shot. The Government has been giving with one hand and taking it with two hands. Now it is aiming to take with two hands without giving anything. Let it not take (no taxes).
By Raju V P, Senior Manager, an International Bank  | 07 08 2010 11:13:46 +0000
0
0

No I m no agree with hike in price of oil already inflation rate is very high

Hike in petrol will control deficit but it will affect transportation cost and everything is depend on transportation.  Hike in petrol will have to pay consumer in indirect way.

Solution to control deficit

Govt. has to think

1. First of all think minimum wages act

2. Cost of fuel will low for commercial vehicles but fuel should be in a limit otherwise they can misuse.

3. Public transportation cost should be low so people will use it instead of private vehicle. This time most of the people using car to reach their office instead of using public vehicle cause it cost less then public veh and comfortable.

4. Charge three times more rate oil to private vehicle of commercial vehicle but first strong public vehicle so it will cost to those who have to spend not to everyone.

5. Double road tax to private vehicles.

6. Hike in parking charges.

Effect

  1. Less fuel consumption
  2. Less pollution
  3. Inflation control
  4. Less traffic on road         

By babru , Accounts Executive/ rcnl  | 07 08 2010 10:52:21 +0000
0
0

I think there is some revenue gap which they are trying to fill. This probably is not the righ method for filling deficits since it can shoot up the inflation which is already very high. Then inflation is the sibling of an expanding economy which no one can control expecially in India since we don't index our wages and we are averse to auto stabilising policies incorporated in our tax system. It might cover up for the deficits in the shorter run but in the longer term it is counter productive, since it can create leakages which will dipress the revenue stream in the long run.
By Mathew Cherian, Research Associate/Analyst, Western Michigan University  | 07 04 2010 17:49:01 +0000
0
0

Oil price hike not necessary.Oil companies are not sincere in decreasing the prices when crude slumps in prices.They earn profit in selling engine oil etc.,

Some profit margin may get decreased ,if they sell at old rate . Private companies like Reliance and Essar may make a hue and cry .About 120000/- crores is waived in this budjet as economic stimulus to big business.Since the oil price hike will lead to price hike of all other items ,a prudent govt should

think in this direction taking into account the BPL people in India.
By meenakshisundaram , Clearing Officer, Canara Bank  | 06 29 2010 16:22:44 +0000
Argue for "Yes"
Argue for "No"
 Found the debate "Are higher oil prices necessary for fiscal consolidation?"  interesting ?  Suggest to your connections and communities  
Managed HR Services
  • Create a confidential Career Profile and Resume/C.V. online
  • Get advice for planning their career and for marketing of experience and skills
  • Maximize awareness of and access to the best career opportunities
Viewers also viewed
Indians shell out the most in the world for petrol! Already there are a lot of difficulties,...
 
2848 referals 27 votes, 791 views
Restructuring market policies,Strictly follows goverment rules vs Your Opinion
 
984 referals 22 arguments, 825 views
Air pollution in Indian cities is growing by leaps and bounds. Shillong is the lest polluted...
 
0 referals 73 arguments, 3226 views
more...  
Recent Knowledge (5)
WE HAD A GOOD NUMBER OF INVENTORS WITH GREATER VISION ABOUT THE SOCIETY. INVENTORS HERE NEED NOT...
 
2 referals 2 arguments, 97 views
C vs B
 
0 referals 3 arguments, 51 views
I am associate of prajapati association and i am working for BJP from year 2005 to till date....
 
0 referals 3 arguments, 111 views
more...  
Sponsored Jobs
More From Author
A set of people believe that dreams change and hence buying a dream home just increases the maintenance cost whereas renting one is relatively better option. In today's world where the property rates are increasing like nothing else. Which...
JV needs more dedication and yes sir back stabbing approach kills it all. The end result of a well set JV with values gives more value.
No we are not.. not right now. We are still in recovery stage and this time I do not think the same mistake will be repeated. Having tough time is one thing and going back to recession is totally different, we cannot mix them.
more...  
  • Popular Knowledge
  •  
  •  
  • Popular Jobs
  •