What is CARBON TRADING????
Intricacies of such new trade investments!!!!!!!!
What it means for individual and for BIG SHOT Companies!!
Tuesday, July 1, 2008
CHAOTIC CRUDE!!
Oil has moved up from a $100 a barrel to over $140 (June 27) in just 115 days.This 40% jump shows an escalation of almost $0.35 per barrel per day. Even when consumers are craving for cover the government finds it difficult to shield the innocent consumers. Apart from the ad hoc hike in the administered prices of petrol, diesel, and LPG India still does not have any policy to respond to the rising prices and demands on an ongoing basis although it imports 70% of its crude oil needs.
IMPACT ON CONSUMERS
Fuel Prices are all set to go up again.The fuel hike,on June 4, was against oil being $127 per barrel. Today it stands at around $140, a 10% increase in 25 days. Prices of branded fuel that are nt administered by the government could be the first to be hiked. Jet fuel prices a set are set to increase thereby further increasing airfares hitting the consumers hard on the face. Next fiscal measure on the verge could be Freight costs hike rendering costly fruits, vegetables and other items.
IMPACT ON OilCOS
We have already seen Reliance Petrol shutting its activity on account of private companies being left out from government based subsidies. We have other oil companies that have put their expansion plans on hold du to the current surge in the prices. The recent upward trend in the crude oil has already undone the math rolled out by the Central Govt barely 3 weeks ago. Under recoveries are Rs. 200,000 crores for the oil companies at current prices. Oil Cos claim that they are loosing about 23/liter on diesel and Rs 13.79 on petrol. Margins are highly under pressure.
IMPACT ON ECONOMY
There will be a cascading effect on all the commodity prices. With fruits, vegetables, steel, iron all set to rise , the devil named Inflation is set to linger around for long. The government Oil import bill is to rise substantially(it already rose by 46% in april) . if the government decides to shoulder the larger portion of the rising subsidy burden in the form of yet more oil bonds, Public borrowings will increase further putting a upward pressure on prices and inflation just like in the case of higher fiscal deficit, even if the government does not count oil bonds as borrowings that constitute fiscal deficit. The combined effect would result in slower economic growth against the claims of FIN MIN. Car sales could be hit and this does not look good for the much hyped People’s car TATA NANO slated to be released by this Durga Ashtami in the third Quarter of this fiscal year.
Sources: ET 27th june.
IMPACT ON CONSUMERS
Fuel Prices are all set to go up again.The fuel hike,on June 4, was against oil being $127 per barrel. Today it stands at around $140, a 10% increase in 25 days. Prices of branded fuel that are nt administered by the government could be the first to be hiked. Jet fuel prices a set are set to increase thereby further increasing airfares hitting the consumers hard on the face. Next fiscal measure on the verge could be Freight costs hike rendering costly fruits, vegetables and other items.
IMPACT ON OilCOS
We have already seen Reliance Petrol shutting its activity on account of private companies being left out from government based subsidies. We have other oil companies that have put their expansion plans on hold du to the current surge in the prices. The recent upward trend in the crude oil has already undone the math rolled out by the Central Govt barely 3 weeks ago. Under recoveries are Rs. 200,000 crores for the oil companies at current prices. Oil Cos claim that they are loosing about 23/liter on diesel and Rs 13.79 on petrol. Margins are highly under pressure.
IMPACT ON ECONOMY
There will be a cascading effect on all the commodity prices. With fruits, vegetables, steel, iron all set to rise , the devil named Inflation is set to linger around for long. The government Oil import bill is to rise substantially(it already rose by 46% in april) . if the government decides to shoulder the larger portion of the rising subsidy burden in the form of yet more oil bonds, Public borrowings will increase further putting a upward pressure on prices and inflation just like in the case of higher fiscal deficit, even if the government does not count oil bonds as borrowings that constitute fiscal deficit. The combined effect would result in slower economic growth against the claims of FIN MIN. Car sales could be hit and this does not look good for the much hyped People’s car TATA NANO slated to be released by this Durga Ashtami in the third Quarter of this fiscal year.
Sources: ET 27th june.
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