The 'Em Tee' Vessel Making The Familiar Meaningless Noise

Published: Friday, May 25,2012, 09:48 IST
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The past two days in India have seen lots of “outrage” on the streets. Petrol prices have gone up by a significant proportion and almost everyone is talking about the same.

In probably the steepest one time hike ever, petrol price at retail level was up by  Rs. 7.50 per litre on Wednesday. Burning effigy of the Prime Minister, slogan shouting, TV discussions, paper articles, and lots of social network discussion.

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manmohan singh, price hike, petrol price
Image credit: Hindustan Times

Most of them, if not all are expected, when a very essential commodity like gasoline becomes expensive. Using Per Capita & currency conversion numbers, I did some quick calculation earlier today. An average Indian earns only enough for 2.55 litres of petrol per day :( Compare this to a litre of Petrol in Venezuela, that too of premium quality, at 1 Rupee and 30 Paise. Yes, 65 times cheaper than Bengaluru retail price! I understand the technicalities of an oil producer/exporter versus a consumer, but still such a steep contrast is hard to miss.

In fact, India was ranked at the top of the Bloomberg pain-at-the-pump ranking for the world! Highest & Cheapest Gas Prices by Country That was before Rs 7.50 petrol hike. What it means it that an average aam aadmi (common man) in India feels the MOST pinch while filing up gasoline, than any other major county's resident today.. A horrible record for India to have. Here is a full chart of the petrol prices in the world, and the relative "pain" at pump - Gas Prices Around The World: Relative To Income, U.S. Has Some Of The Cheapest Gas In The World. You can see India (line 37) as the most painful place. Here is another way of looking at the comparison across countries. The petrol price in USA today is Rs.60 per litre. But if an American earned as little as an Indian, that would have "felt" like Rs.2985 per litre!!

So no matter how you slice and dice the data across the countries, India is a terrible place for filling petrol at a petrol pump. It pinches almost everyone, except those who get subsidized diesel or gas, at tax-payers cost.. a.k.a. the infamous politician or neta.

One such infamous politician opened his mouth yesterday evening. The trusted spokesperson of Congress party, who has earned the nickname “Em Tee” on social networks, short for his name's initials, but more profound in the meaning due to his constant meaningless and empty verbal diarrhea.

Manish Tewari started today also in the predictable note. Congress says it had no role in petrol price hike

Two gems from this gentleman:

“The Congress leader attacked the BJP over the issue reminding that fuel prices were hiked more than 30 times during the NDA rule.”

“The international price of crude oil is high and there is pressure on the rupee”

We can understand the obsession with BJP led NDA regime that ruled India before Manish's party came to power in 2004. It's a political compulsion to blame everything bad on the earlier government. The fact was that during BJP's regime about 10 years back, on Aug 16, 2002, 1 litre of petrol in Delhi was Rs.29 & one litre of of Diesel was Rs.18. That's almost 2.5 times increase in cost over a decade, but we will skip the argument part with Manish Tewari's “numbers” and what it really meant to contemporary global oil prices, wars and much more. Even after yesterday's price hike, the lowest petrol price in India today,  is in the BJP ruled Goa at Rs. 62.5. Beat that Congress instead of just harping on BJP for all your policy deficiencies:)

manmohan singh, manish tiwari, price hike, petrol price
Image credit: One India

But the second part was quite interesting and got me thinking. So Mr.Tewari.. “The international price of crude oil is high?” Are you really sure when speaking for the government of a country, you can get away with such statements? Also the “pressure on the rupee” you talked about sir.. is that your government's fault or something beyond Team Sonia's capabilities under a so-called “economist” Prime Minister?

You shouldn't get away so easily.. and here's why.

International Oil price is a complicated topic. To put it in simple terms is not easy. There is no stock as such in New York Stock  Exchange for which we can draw a chart and show. Since Oil is a commodity, it is traded in commodity markets. The most commonly used parameter is the price per barrel of oil in United States Dollars. ($ pb). We will show a few ways to look at the price over the past year.

a) Crude Oil (petroleum) Monthly Price - US Dollars per Barrel. You can see a 2.21% slide in the price of crude oil over April 2011 to April 2012 period, using this chart.

Crude Oil (petroleum) - Monthly Price - Commodity Prices - Price Charts, Data, and News - IndexMundi

b) West Texas Intermediate or WTI is a grade of Crude oil, used as a benchmark in oil pricing.

c) The same WTI Crude is traded as a future in the Futures market. Here is the chart of WTI future over the past year. You can see a slide from $101 to $91 over the past 12 months.

live chart, petrol, hike, indian petrol rates

d) Using the Live Charts from Europe, Live Charts - Crude Oil Chart and Live Oil prices you can see that the price now is 92.32 as opposed to the range of 97.24 and 102.96 a year ago.

live chart, petrol, hike, indian petrol rates

e) Go to www.stockcharts.com site and search for $WTIC on a weekly basis to see for yourself, Light Crude Oil spot price is hovering around $90.60 as of May 24th 2012.

live chart, petrol, hike, indian petrol rates

f) And, I promise you, this is the last chart.. USO is an Exchange Traded Fund (ETF) which is very good benchmark on how people are trading on Oil prices. USO stands for United States Oil Fund. You can read more here. The ETF: United States Oil Fund (USO)

Between 23rd May 2011 and 23rd May 2012, you can clearly see a steep decline of 11.38%, which essentially tells us the mood of investors when it comes to crude oil investment.

Now that we had an overflow of charts, let's also examine a few reputed papers to see what they are telling us. Not only the charts, even news reports are extensively telling us that Mrs. Sonia Gandhi's team is painting a wrong picture to Indians, via Mr.Manish Tewari.

a) Check yesterday's Fox Business News for instance. Crude Ends At 2012 Low On Supply Rise, Demand Drop

Crude oil futures prices settled at a fresh seven-month low, breaking below $90 a barrel Wednesday, as the latest U.S. weekly oil data showed stockpiles remaining at 22-year highs amid sluggish demand.”

b) Check USA Today reporting on May 7th, 2012. Crude oil prices continue to fall on U.S., Europe news

Oil prices continued a three-day slide, falling below $98 a barrel Monday as a slowdown in U.S. hiring and election results in Europe dimmed expectations of stronger economic growth.”

c) Check USA Today reporting on May 16th, 2012. Crude oil prices continue to fall as supplies grow

“  Benchmark U.S. crude fell by $1.17 to finish at a seven-month low of $92.81 per barrel on the New York Mercantile Exchange. Oil is down nearly 13% since the beginning of May.

Brent crude, which helps set the price of oil imported into the U.S., fell by 53 cents to finish at $111.71 per barrel in London.

Prices fell as a report showed that U.S. crude supplies had climbed to the highest level in 22 years”

What? Supplies are hitting historic highs compared to 22 years of data and the price has fallen 13% just in two weeks of May 2012? Mr.Tewari didn't tell us that part I guess, for obvious reasons. No matter which way you look, it is very hard to justify the International price of crude oil is “so high”, that UPA government is trying to convince the gullible Indians.

During the same period, don't forget that the petrol prices have gone up over 25% in most cities of India. For instance, in Bengaluru city, petrol was around Rs.65 in most pumps on May 14th 2011. Today, nearly Rs.82 in the same bunks. That's 26.15% hike for the same commodity in 12 months! That too during a period when the global crude oil rate dropped on a year-to-year comparison.

What is worse? The same UPA government gave ads about petrol and other prices being so “affordable” just 3 years back.  Watch this short ad from 2009 election. Video : "Vote for Congress" Ad in 2009, Looks Funny Now! Those who trusted such election bogus promises, must be the feeling so let down today.

If Congress party had done some homework on what was already in press earlier today, Mr. Tewari's statement would not have looked so amateurish. Why is the Rupee on a free fall mode? There's  strong speculation that this is to enable scamsters make huge profit shifting their stashed money from three Switzerland banks back to India. "Rupee-dollar fluctuation a scam, alleges BJP" No need to guess who might have stashed large sums of money abroad.

To sum up, Indians had to endure yet another price hike, even anticipating a small “rollback” that is a gimmick UPA government plays often. To make it worse, they send folks like Manish Tewari to utter things contrary to reality. And worse, when cornered by public and other political parties, they even resort to the most idiotic way like this.

"even leaders of the Congress have said they did not know about the price rise and have joined the chorus that the hike be withdrawn." Petrol price hike: Congress demands rollback, say sources

If Congress party leaders were “not consulted” by a Congress led government, if there's unexplainable “pressure on Rupee” under an “economist” PM led government, and if the government's spokesperson blatantly lies to the nation that the “international price of crude oil is high”, when it is actually lower than one year back, the real aam aadmi of India would have felt the proverbial injury to insult today.

Bad luck buddy... I mean... bad luck India's aam aadmi.


Author : Kiran KS | Follow the writer on twitter/KiranKS
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Kiran KS is an Information Technology industry veteran who is well traveled observing global IT trends. He has the habit of closely watching current affairs, spirituality, social development and politics. He is active on social networks talking about his hobbies, rather than primary business line.
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Disclaimer: The author is a commentator on issues of national interest. These are his personal views and do not necessarily reflect IBTL's opinion.

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