joel.francis.7351
Par 100 posts (V.I.P)
With the Crude price going down every day, I am receiving requests from my regular reader to talk about the impact of the same in Indian Oil Prices and Indian Oil Manufacturing Companies. Well, let me start with Oil Price Calculations.
How Oil Price is Calculated in India?
As seen above oil prices after conversion cost / central and state taxes is lower by Rs.1.38 to Rs.33 when compared with the petrol prices charged in India which is Rs.64 at this moment of time.
Oil supply contracts are entered for a long term say one year to 5 years and mostly the average price will be around USD 70 per barrel. So, effectively the petrol prices should be Rs.46 to Rs.47 and it may not come down much due to fall in Crude Prices in International market.
As seen above there is a GAP of Rs.17, if we assume our crude price is USD 70 per barrel.
It is very difficult to categorically ascertain how Rs.17 will be used by Govt in NEXT Budget. But it will be surely used to provide cushion to reduce Fiscal Deficit by Finance Minister.
Both the categories of the companies are controlled by Govt policies and Govt policies keeps on changing from time to time. Moreover, they are affected by International crude prices and USD exchange rates.
This makes it difficult to forecast the reasonable long term scenario of these companies!!
How Oil Price is Calculated in India?
As seen above oil prices after conversion cost / central and state taxes is lower by Rs.1.38 to Rs.33 when compared with the petrol prices charged in India which is Rs.64 at this moment of time.
Oil supply contracts are entered for a long term say one year to 5 years and mostly the average price will be around USD 70 per barrel. So, effectively the petrol prices should be Rs.46 to Rs.47 and it may not come down much due to fall in Crude Prices in International market.
As seen above there is a GAP of Rs.17, if we assume our crude price is USD 70 per barrel.
It is very difficult to categorically ascertain how Rs.17 will be used by Govt in NEXT Budget. But it will be surely used to provide cushion to reduce Fiscal Deficit by Finance Minister.
Both the categories of the companies are controlled by Govt policies and Govt policies keeps on changing from time to time. Moreover, they are affected by International crude prices and USD exchange rates.
This makes it difficult to forecast the reasonable long term scenario of these companies!!