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There is a big game going on in oil. If no one’s attention is on this side, then the reason is that the prices of petrol and diesel have not increased since April 6, the foundation day of BJP. On the contrary, the prices of both the fuels have come down. Since most of the people in India are concerned with petrol and diesel only that their price is increasing, decreasing or constant. The price is not increasing and due to the one-time cut in excise duty in May, petrol became cheaper by Rs 9 and a half and diesel by Rs 7 per liter. So, what do you need after that? Ukraine and Russia are fighting, oil producing and exporting countries are not increasing production, crude oil prices are increasing in the international market, yet oil is not getting expensive in India, then everyone is satisfied. They do not know that there is a big game of oil in the retail business of oil and beyond the retail price.

This oil game has become entangled and along with it the government is also entangled. The government is not raising oil prices under its compulsion. The prices of both petrol and diesel are already sky high and in the next few days assembly elections are going to be held in two states. That is why despite the increase in the price of crude oil by $ 15 per barrel in the international market since April, the prices in India have been kept stable. This is reducing the profits of state-owned petroleum marketing companies. Despite this, they have a compulsion, which they are providing fuel in sufficient quantity. But there is no such compulsion for private companies.

So, they cut the supply of oil as soon as the profits fell. As a result, there was drought at petrol pumps in many parts of the country. For two-three weeks in June, there was a shortage of petrol and diesel in many states as companies reduced supplies. Such a situation arose in many states. According to a report, an average of four hundred petrol pumps remained closed for several days.

It is not that only the petrol pumps of private companies were closed, the government companies also reduced the supply. In the last week of last month, one day two hundred and two hundred petrol pumps of Hindustan Petroleum remained closed due to non-availability of oil. 130 petrol pumps of the largest oil marketing company Indian Oil also remained closed and more than 50 pumps of Bharat Petroleum remained closed due to shortage of oil. Despite this, the oil marketing companies kept denying that there was a shortage of oil. In fact, for the last two-three months, both public and private petroleum companies are creating an environment that due to the rise in the price of crude oil, they are losing their retail business. Despite creating an environment for them, the government is not allowing them to increase the prices. Keep in mind that there are about 82 thousand petrol pumps in India, out of which a little more than seven thousand are owned by private companies. On most of these the supply has run out or has stopped.

Think, the government has been telling this story for years that the companies themselves decide the oil prices according to the market, then when the companies are incurring losses, why are they not increasing the price? Instead of increasing the price, they are reducing the supply. From above they argue that the demand for oil has increased by 50 percent compared to last year. The question is, do they not know that last year due to Corona, the consumption of oil was reduced in the lockdown, so this year it had to increase compulsorily? The government itself admitted in mid-June that there was shortage of petroleum products in some states, especially Madhya Pradesh, Rajasthan, Karnataka etc. and people had to face problems. The question is, when crude oil is being imported in sufficient quantity, then how can the oil marketing companies reduce the retail supply?

This is where the game of the oil companies is going on. Apart from Indian Oil, Hindustan Petroleum and Bharat Petroleum, two private companies market Nayara Energy and Reliance Petroleum oil in India. It is the compulsion of the three government companies that even if the government is not allowing to increase the price, they should ensure the supply. But there is no such compulsion for private companies. So he reduced the supply at his petrol pump and increased exports. India’s private refineries and marketing companies have taken the biggest advantage of the sanctions imposed on Russia due to the Russo-Ukraine war. They are getting crude oil from Russia at a very cheap price and they are refining and selling it in the same countries of Europe, which are not buying oil directly from Russia due to restrictions. Due to this, oil companies have earned profits by tearing thatch. According to a report, in the last month i.e. June in India, an average of 1.2 million barrels of oil has been bought from Russia every day. In this sense, Russia has become the largest supplier of crude oil to India – bigger than Saudi Arabia and Iraq!

Now that the Government of India has woken up, it has imposed additional tax on the income earned by private companies. The government has imposed an additional duty of Rs 6 per liter on export of petrol and aviation fuel and Rs 13 per liter on diesel. Along with this, it has also been directed that refinery companies should make available half ton of fuel for domestic requirement on one tonne export. Apart from this, a cess of Rs 23,250 per tonne has also been imposed on domestic production of crude oil. The government should have taken such steps earlier and ensured that private companies may make profits but do not create hardships for domestic customers. On the one hand, crude oil is getting expensive in the international market, on the other hand the domestic demand is increasing and the government is not allowing the oil companies to increase the price. In the midst of this, government and private companies are reducing domestic supplies citing their losses, which is causing problems to the people. The government has to keep an eye on this.

Shubham Bangwal

Shubham Bangwal is a Senior Journalist at You can follow him on Twitter @sb_0fficial
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