The government’s decision to allow fuel-retailers to change petrol and diesel prices everyday, in sync with global prices, is a progressive step. It will bring oil pricing in the country closer to the best practices in the international market. To begin with, state-owned oil firms will implement this policy in five cities — Puducherry, Visakhapatnam, Udaipur, Jamshedpur and Chandigarh — from May 1. The government aims to have daily market-linked prices at all petrol pumps in the country, but has not specified a date by which it intends to have such a practice in place. Currently fuel retailers revise prices every 15 days based on the average prices in the preceding fortnight and the currency exchange rate. In the new pricing regime, petrol pump rates will reflect daily movement in international prices and rupee-dollar fluctuations. This means that the Indian retail market will be more closely aligned to global oil market dynamics and the consumer will be cushioned against sharp surges in prices — often the case with the 15-day pricing cycle.
The benefits of a competitive market will, however, still elude the consumer. Since May 2014 when the current government assumed office, global crude prices have fallen from $ 108 to $ 55 per barrel. In comparison, petrol prices in the country have fallen marginally — in Delhi, only by about Rs 5 a litre, from Rs 71.41 to Rs 66.29. The gains from the falling prices have largely been pocketed by the government through increased excise duty. The country’s import pricing parity means that the state-run PSUs, and a few private outfits, sell oil at the same price. Unlike in mature markets, oil prices within an Indian city do not vary from one petrol pump to another and the consumer does not have much of a choice with respect to oil prices.
Only state-owned firms, the exploration and production outfit, ONGC, and private refineries can import petrol and diesel in India. The country does not have a policy for independent fuel retailers. Compare that to the US where the likes of ExxonMobil, Chevron, Shell or Conoco-Phillips own barely 5 per cent of the fuel outlets. The rest of the retail business is run by independent players, who are in no obligation to ensure business to a captive refinery. In contrast in India, an IOC fuel outlet, for example, buys petrol or diesel from a refinery run by the same PSU outfit. Such elimination of competition means that decontrolling retail prices will give the consumer only a modicum of the benefits of the market. A policy on independent oil retailers should be the next move on the government’s agenda.
IMPORTANT WORDS FROM ARTICLE & THEIR MEANING
1) Progressive (प्रगतिशील) - Prog-res-ive
- Meaning - happening or developing gradually or in stages - Adjective
- an advocate of social reform - Noun
- Synonyms - continous, increasing
- Antonyms - moderate, conservative
- Example - A progressive decline in popularity.
2) Dynamics (गतिकी) - Die-nam-eiks
- Meaning - the forces or properties which stimulate growth, development, or change within a system or process - Noun
- Synonyms - gesture, passage
- Antonyms - stagnation, repose
- Example - Our company is seeking a dynamic president who can easily adapt our strategic goals to meet the ever-changing economy.
3) Surge (महोर्मि) - Sir-ge
- Meaning - a sudden powerful forward or upward movement, especially by a crowd or by a natural force such as the tide - Noun
- (of a crowd or a natural force) move suddenly and powerfully forward or upward - Verb
- Synonyms - gush, rush
- Antonyms - decline, decrease
- Example - Investors surged to the company, and its stock price multiplied.
4) Elude (टलना) - El-oo-ed
- Meaning - escape from or avoid (a danger, enemy, or pursuer), typically in a skilful or cunning way - Verb
- Synonyms - evade, avoid
- Antonyms - abet, aid
- Example - The criminal was able to elude the police in the crowded mall.
5) Obligation (कर्तव्य) - Ob-li-ga-tion
- Meaning - an act or course of action to which a person is morally or legally bound; a duty or commitment - Noun
- Synonyms - agreement, bond
- Antonyms - asset, disbelief
- Example - Teachers have an obligation to correct students' homework as soon as possible.
6) Captive (बंदी) - Cap-tiv
- Meaning - a person who has been taken prisoner or an animal that has been confined - Noun
- imprisoned or confined - Adjective
- Synonyms - caged, bound
- Antonyms - independent, free
- Example - He added that the new loan program has a captive audience.
7) Modicum (à¤ोजन की थोड़ी मात्रा) - Mod-e-cum
- Meaning - a small quantity of a particular thing, especially something desirable or valuable - Noun
- Synonyms - ounce, shred
- Antonyms - lot, total
- Example - All I need is a modicum of money to pay for my basic needs.
8 Insurrection (विद्रोह) - Long-ani-mity
- Meaning - a violent uprising against an authority or government - Noun
- Synonyms - revolt, rebellion
- Antonyms - calm, peace
- Example (English) - In 1923 he took part in the communist insurrection in Germany.
- Example (Hindi) - 1923 में उसने जर्मनी में साम्यवादी बगावत में à¤ाग लिया था।
Now considering the article above as a Reading Comprehension question, try to answer the following -
- Why are petrol prices rising in India? What can be done to maintain a standard price?
- Petrol rises when crude oil climbs, but never when it falls, does it?
Given below are some words to check your vocabulary you can make sentences with those words in the comment section which will be reviewed by us.
- Implement
- Preceding
- Fortnight
- Regime
