Oil Minister out to flay us All

The Oil Minister has met the PM and has had discussion on fuel price hike on Saturday. The EGoM (Enhanced Group of Ministers) will be meeting today to decide the fate about fuel prices.  The reason?  It seems the Oil companies are losing money and the politicos’ hearts are bleeding blood (or oil) for them!

To read the reports, it is not only a one off decision to be taken, it is actually handing over the price fixing mechanism to these oil companies.

Now I don’t understand a couple of things:

• The claimed loss of around Rs. 60,000 crores (~ USD 12.5 Billions) by Oilcos is currently borne by the GoI – the GoI reimburses the Oilcos from this revenue.
• GoI derives its revenues from its citizens and “others” (remember there is also a revenue from individuals and organisations which are not Indian but pay taxes, duties, levies etc.- like Warren Buffet or Goldman Sachs & other FDI’s when they play in the share market, ESPN-STAR on their ad revenues et al)
• To take it a step further, when a Paki in Pak watches IPL, or ‘kyun ki sass bhi bahu thee’, he pays taxes to GoI, through his broadcast rights procurer, doesn’t he ?
• So effectively, HSBC or Citi or Google or Coke or even a Paki is paying say Rs. 48/- ($1) for my LPG cylinder – once in a month.
• Now they want to transfer this ‘claimed’ loss on exclusively to the Indian Consumer – to you and me - and let off an alleged hanky-panky Rajat Gupta and Javed Miandad?
• To top it, GoI owns almost 80% of these Oilcos – see the IOC’s share holding pattern - with the general public (you and me) owning less than 3% 
• In effect 80% of this loss is borne by the GoI, through its promoters stake, and which it reimburses - reimburses itself from the right pocket to the left 
• If this convoluted reimbursement disappears, what we, the consumers, actually pay is in effect ‘more tax’ – a form of direct tax, indirectly to the GoI - and a whopping 10% at that or is it 120% ? (say an increase of 10% on price of LPG cylinder at 1 cylinder pm)
• In fact, profit by Government owned corporations is termed Hidden Tax.
• Since tax collection by other means is always wasteful, a large part of this tax is not going to be available to the GoI to be spent on us.
• Any fuel price hike will lead to inflation - not only us Indians but even Kiwis say so  - and our PM wanted to control inflation, just a week back last Monday.
• Won’t the costlier LPG force people to opt for other means of cooking, like reverting to burning wood or coal and increase Asian brown cloud and its impact on Global Warming?  Knock Knock remember ‘climate change’ anyone?

Is there any saving grace at all ?  I do have hopes:

1. Mamata Didi and the TN strongman are part of EGoM and they would be able to understand this instinctively – provided they deem to attend the meeting.
2. The Fin Min Pranabda is the one lasting hope – he is a politician who is not easily taken in by some “technocrat’s” mumbo-jumbo like this.

Unfortunately, the PM considers himself a technocrat, forgetting he was just a bureaucrat and is easily taken in by these smoke and mirror talks.  Instead of above, can’t the GoI ask these Oilcos to cut overheads?  Can’t it be done?  Perhaps, I’ll have to take a look at that soon.

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