Published on December 7, 2014
1 1. Theme – Oil Pricing Policy in India Abstract We observe that India is richly endowed with crude oil reserves; however these are not being fully utilized. The prices of petrol, diesel, LPG and CNG are often revised. This causes a lot of uneasiness in the economy. The price rise is not taken in well by most sections of society specially the common man. Why do prices of these products rise and how are they influenced by the international prices, these basic questions can be understood in a simple way, although these are very complicated issues. Our economy at present seems to be compelled to import crude oil from the OPEC to meet over 70% of its need. With fluctuating price of foreign exchange in favour of the US dollar, the economy pays a heavy price for its import. It is imperative that ways to be self- reliant in petroleum usage are developed; alternative means of energy need to be used in everyday life. Recently policy decisions have reduced the subsidies provided by the government on petroleum products as these add to its budgetary burden. Fiscal deficit needs to be curbed. One way to reduce the burden of subsidies is to de- regulate the price of petrol and diesel. The need of the hour is to develop refining facilities within the economy, popularize the non- conventional sources of energy like solar, wind and natural gas. Also a lot can be done at home, in place of work, on the roads to reduce energy consumption. It is in the interest of all to consciously adopt ways of conserving energy. Source: www.telegraph.co.uk Fig. 1 Crude oil is referred to as petroleum in its unprocessed form. It is a dark sticky liquid as you can see in the picture above. It is scientifically called hydro carbon. As you must have read in your previous classes’ crude oil is formed from plants and animals that were buried deep millions of years ago. The remains got converted into oil and gas due to heat and pressure.