REASONABLE OIL PRICE 50 DOLLARS BUT GREEDY NATIONS SELL AT 140 DOLLARS
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.
INDIA MUST HAVE A NON-POLITICAL FINANCE MINISTER. This demand by a registered political party Dravida Peravai may surprise the readers. We in our party manifesto registered with Election Commission of India, have advocated party-less democracy as panacea to Indian political party dominated political scenario. Hence it falls in our moral duty to suggest that Nobel Laureate Amarthya Sen should be made India’s Finance Minister.
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