I News India - Empowering Ideas!

OPEC president Chakib Khelil on Tuesday said that Oil prices “will not come down.” He however assured that the oil cartel has already done what it can do in the matter but there is no hope of coming down of surging oil price rates.

“OPEC has already done what OPEC can do and prices will not come down,” Khelil told journalists as he arrived for a meeting with EU energy officials in Brussels.

Due to the increase in international crude oil price, government wants a price hike in fuel to combat the crisis. Can’t the central government reduce the price in the same situation??

Yes, government can reduce the price. But centre is busy in making profits by fooling the public.

Have a look at the following data (approx) which will itself explain all the fact:

Total petrol price paid by public: Rs. 56.61

• Basic Price of Petrol = Rs. 21.93
• Excise duty = Rs. 18.35
• Education Tax = Rs. 0.43
• Dealer commission = Rs. 1.05
• VAT = Rs. 6.30
• Crude Oil Custom duty = Rs. 1.10
• Petrol Custom = Rs. 1.54
• Transportation Charge = Rs. 6.00

Hence for Rs 22 liter petrol at pumps we people pays Rs 34 tax extra. It’s more than double the actual rate of petrol. Should tax be so high? Can’t government reduce this tax to a satisfactory level? What you say?

Tags: Oil, Oil Prices, OPEC, Rising Price

Crude oil price are soaring to historic heights and is a cause of concern in the global market. Crude oil prices make a hit on March 17 over the $111.80-per-barrel mark which now fell down to $105.11. Indian refiners buy at $101.2 per barrel with an increase in international crude oil price.

If not controlled the soaring prices can upset the booming economy.

The main factor behind the crisis is said to be fall in the dollar rates. A weaker dollar is increasing the oil demand as it becomes cheaper for buyers using stronger currencies.

Another factor that can be considered for an increase in Oil prices is because the investors are seeking a safe investment for their cash amid fears of rising inflation and a US recession.

Political tension in Kenya, Algeria and Pakistan as well as the threat of US sanctions against Iran earlier this year also provoked the issue.

Nigeria being the world’s eighth largest oil exporter and threats to oil facilities there is making another factor of oil price hike.

Saudi Arabia is the largest reservoir of oil with 21.9 per cent of the world’s reserves. Saudi Arabia produces over 600 million tonne of oil per year, according to the Oil & Gas Journal.

Canada comes next to Saudi Arabia at 179.2 billion barrels while Iran is at position third. This is roughly 10 percent of the world’s total proven petroleum reserves.

Also Iran is the fourth largest oil producer in the world and is OPEC’s second-largest producer after Saudi Arabia. Iran had the world’s second largest reserves of conventional crude oil at 136 gigabarrels as of 2007, although it ranks third if Canadian reserves of non-conventional oil are included. (1 gigabarrel = 1,000 million barrels)

Demand for oil is increased by double in last 3 years which hiked the global price. It was $50 per barrel in March 2005. By June 2008, oil prices doubled to cross the $100-mark. The demand is growing despite a slowdown in the US. Refining margins may continue to be high because of a shortage of petrol and diesel globally.

Tags: Oil, Oil Prices, US