MAKE AMARTHYA SEN FINANCE
MINISTER
SACK CHIDAMBARAM
Today the
meeting of Oil Producing and Exporting Countries is taking place initiated by Saudi Arabia
which was pressurized by G-8 and others to ponder over stabilizing the oil
prices. The panacea Saudi Arabia
offers is a hike of 6 percent of its oil production, hoping other countries
will follow suit. We are of the opinion that this will not work. The rising
prices of oil and petroleum products could not be arrested. Why do we opine so,
let me record our views.
1. Saudi Arabia is
not, as many may be thinking, the largest producer of oil. Russia stands first, and there is
no hope that Russian President will play the Saudi Arabian tune of increasing
oil production.
2. The worlds
largest 20 oil fields were all discovered between 1917 and 1979 and the annual
output from these oil fields is falling by 4 million barrels per day, says a
Report of Earth Policy Institute. Taking into account country specific data
details and projections, German based Energy Watch Group concludes that world
oil production has peaked. It will also decline by 7 percent a year falling to
58 million barrels per day in 2020.
3. The year our
former President A.P.J.Abdul Kalam predicted to be a turning point to make India a super power, 2020, will make India run from
pillar to post begging for oil. The begging for oil is going to be the order of
this century, and there has to be introspection.
4. Venezuela , the fifth largest producer of oil had
declined to attend the Summit of OPEC called by Saudi Arabia . It opines cosmetic
exercises like hike in production a little bit will not be a long term
solution. The Socialist President of Venezuela , Mr. Hugo Chavez, who
finds a place among leaders this century must emulate displayed in Dravida Peravai
banners, feels the increase in production is not to ease oil prices and reduce
the burden on common man, but to help speculation. He had earlier said in a BBC
interview in 2006 that by 1990, the price of a barrel was just 20 US dollars.
The oil producing countries must have a long term policy and fix the maximum
profitable and reasonable price of 50 US dollars per barrel, and if the
countries arrive at a consensus to sell oil at 50 US dollars per barrel for a
long period, that alone will help the world, Mr. Hugo Chavez opines.
Dravida Peravai
feels he is the voice of the conscience of the world. A nation that got Independence led by Mahatma Gandhi must back Venezuelan
President in world forums but India
also joins the chorus of greedy nations, sorry greedy companies that dictate
their nation’s choices, in keeping oil prices in high. Our rulers are only for
slight reduction in prices as eye wash. They are not even speaking loud for
common good of the mankind.
The supply and
demand of oil on an average remains 85 million barrels per day. Till 2003 USA was only
holding 350 million barrels as buffer stocks. Now it had doubled to 750 million
barrels, which also creates artificial scarcity resulting in hiking of prices.
By 2006 when oil prices touched 60 US dollars per barrel, The Senate Committee
of USA woke up and examined the ground reality and told the ‘stock piling of
companies hoping to make a kill when prices go up’ is also one of the reasons
of soaring oil prices.
M.R.Venkatesh, a
Chennai based chartered accountant rightly pointed out in rediff.com, that OPEC
is not determining the prices of oil, but 4 American finance companies. Goldman
Sachs, Citigroup, J.P.Morgan Chase, and Morgan Stanley are determining the rise
in oil prices, this Indian scholar points out an accusing finger. American
financial markets are investing in commodity trading, which they see is
profitable than stock markets.
How this is
being done? “After loosing money in the housing market, big hedge funds and
investment banks are now pouring money into commodity markets, including oil,
which are much less regulated than stock markets. They are not buying or
hoarding actual oil, and hence do not have to incur the cost of storage.
Instead they are buying oil futures with borrowed money at low rates of interest
that is buying papers that entitle the holder to get oil after, say three
months, at a price negotiated today. These papers are traded in commodity
exchanges, just like company shares in stock markets” says Alok Ray, Professor
of Economics at IIM Calcutta.
Indian
Government headed by Mr.Manmohan Singh, with a Finance Minister like
Mr.P.Chidambaram, with whom we cannot sympathize because he is a Tamilian, will
never rule India
with the interests of Indian common man in mind. They will be the spokespersons
of the American companies, helping greedy men of the world to rob the mankind.
Their advisers like Mr.Shankar Acharya, not the enemy of Jayalalitha, but a
Member of the Board of Governors at Indian Council for Research on International
Economic Relations say that “oil pricing had been seriously bungled by the
Government in last few years. Government should raise fuel prices gradually and
more frequently”. If a Government that keeps such advisers is run by
anti-people vested interests shielding the western countries and their greedy
companies, we have to be content with periodical oil price rises followed by
cosmetic reductions in election eve to hoodwink the people.
The Union
Government must have convened the National Integration Council or convened the
Chief Ministers Conference to discuss the Value added Tax on petrol and diesel.
Gujarat imposes 29.13 percent VAT on diesel
and 29.88 percent VAT on petrol. The Left ruled West
Bengal imposes 20.62 percent VAT on diesel and 27.66 percent on
petrol. West Bengal also levies 4 percent tax
each on kerosene and cooking gas. In Andhra Pradesh ruled by Congress 33
percent VAT on diesel is the order of the day. Punjab
imposes 30 percent VAT on petrol. IS IT NOT THE DUTY OF THE UNION GOVERNMENT TO
DISCUSS WITH STATES TO BRING UNIFORM REDUCTION IN VAT AND TO REDUCE OIL PRICES
DRASTICALLY AFTER ALL THE PEOPLE ARE THE ULTIMATE MASTERS IN A DEMOCRACY.
[Press Release
of 22nd June 2008, a part of which will be telecasted by a local
channel Rainbow channel]
N.Nandhivarman,
General Secretary Dravida Peravai
No comments:
Post a Comment