00:00Hello and welcome to this yet another brand new episode on One India, where we discuss
00:05how the possible steps and the futuristic measures taken by the Narendra Modi government
00:12is shaping the days to come, the years to come. One crucial aspect is that of the Russia-Ukraine
00:20war and how Russia very recently and now Italy has said that it's India which can play the
00:28piece next role and it's Prime Minister Modi who speaks freely with all the three of them,
00:34Russia, Ukraine and the United States. One key aspect as I mentioned is oil which India has been
00:40a recipient from the Russian side and Uriya obviously again a recipient from both Ukraine
00:48and Russia. How has India managed this and what is the price that India is paying for it? To
00:52discuss that further we are joined by Ravi Srivastava, former chief manager of HPCL,
00:58also known as Hindustan Petroleum Corporation Limited. Ravi sir, thank you so much for
01:02taking time out on a Sunday morning for us. Thank you, Pankaj ji. You have rightly said
01:13the oil and Uriya where majority of the subsidies were going from the pocket of the government.
01:20The fact remains is since 2001 when the APM, administered price mechanism, was added to the
01:26fuel price, the subsidies have drastically come down. At present, the subsidy is only to some
01:36extent on LPG and to some extent on kerosene. As far as diesel and the petrol prices are concerned,
01:43they are totally deregulated and the government has got no say. It says so that they've got no say
01:51but the fact is instead of administered price mechanism, now it has become MDPM,
01:57they call it market determined price mechanism, I call it minister determined price mechanism.
02:03So it is decided, everything is decided in the Shastri Bhavan only that who will charge what
02:09price etc. etc. The prices were deregulated officially but the fact is that the prices are
02:18still determined by the government only and the objective is that the private players
02:24should not exploit the consumer and the prices remain under check. We have got a private player
02:31there. Earlier there was SR, now Reliance is still there into existence who are a private player
02:38selling it. Nehara Energy is there, SR converted to Nehara Energy, so they are also in the market.
02:44So these are certain things I was talking about excise duty. The excise duty, a huge amount of
02:51excise duty is recovered by the government which was, first while government was taking some
02:579 rupees a litre on petrol, now this government recovers 32 rupees a litre on petrol and a huge
03:04duty on diesel as well, which makes the price, the pump price very high. We all pay approximately,
03:13most of the cities the petrol is 100 rupees plus and the diesel also is some 90 rupees plus
03:19everywhere barring your Delhi where you get slightly cheaper fuel. So the fact is that this
03:26money was recovered and the government said that they are going to utilize this money for
03:31infrastructure development, the government schemes, all those things they have happened.
03:36But as rightly mentioned, there has not been much of the job creation which is India's
03:44biggest problem, I would say as of now, where the graduates, post graduates applying for the post
03:50of a sweeper and all that. Now let us come down to the international scenario. You may recall
03:56India's, when Shri Modi took over, India's dependence on foreign crude oil was approximately
04:0482 percent and we were producing our own by OIL and ONGC, approximately 18 percent
04:13of the crude was produced by us. As far as LPG is concerned, it was a 50-50 and we were importing
04:20lot of LPG since then and we are selling it here. Now as far as the dependence is concerned,
04:28the worst part is that today we are dependent to the extent of 88 percent on the foreign
04:36and a huge amount of foreign exchange goes out for buying the crude oil from foreign countries.
04:43The silver lining is that I would say that the came to the advantage of India,
04:50the Russia-Canadian war, Russia is supplying lot of crude oil to India and that is relatively
04:57cheaper if India buys from US, Venezuela or Middle East. So that comes relatively at a lower price
05:06and therefore, we were able to save some of the foreign currency as well.
05:12Here the issue is Modi ji went to Ukraine, Modi ji went to US also and he has been bargaining
05:19with those countries to accept the payment of crude oil in rupee terms, which those countries
05:26have unfortunately not agreed to. So still the settlement is in ruble or in dollar with the
05:33country, Russia, which is supplying the crude to us. Now as far as India's position is concerned,
05:42the government has been making a good effort to shift from motor fuel, petrofuels to the alternate
05:49sources of energy, may it be thermal, may it be atomic, may it be windmill, may it be solar,
05:55they are making a big effort in that direction and which has yielded result also. So India's
06:03dependence upon the petrofuels has been almost, I would not call it stagnant, but it is going at a
06:12very low pace. I mean, the rise is very limited and sometimes you will find the petrol diesel sales
06:18are even lower than the previous year in some cases, sometimes it goes up, these are all seasonal
06:23factors and the rising production of the automobiles is also a contributor to this
06:30aspect of motor fuel consumption going up. Otherwise, you will find that the electric
06:36vehicles are being given a lot of incentives and a lot of electric vehicles are also being
06:42sold in the country. The buses which were a big consumer are being changed to the electric and
06:50many, you would recall even that a lot of diesel locomotives which were consuming a fairly good
06:56amount of diesel, now those are running on electric. Problem with the government on this
07:03part is, despite the crude oil prices lowering down, it has now come down to below $70 a barrel
07:11now, you have seen yesterday, day before. The government is still continuing to cover a huge
07:17amount of excise duty on motor fuels, which is just not right thing to do, because the consumption
07:26of the diesel contributes a lot to the overall economic prosperity of the nation. You take it
07:34logistics, you take it motor fuels, you take it gen sets, where all diesel is consumed, the high
07:42prices are a detriment. And there has been a very strong voices coming out from the opposition
07:50to bring down the prices of motor fuel, like petrol and the diesel. And then in the last few
07:55days of the week, I have heard that the government is giving a now serious thought to it to bring
08:00down the prices of motor fuels, petrol and the diesel. So if that happens, I think it will be
08:06positive for the industry and the people at large. Yeah. Right. Mr. Srivastava, also talking about
08:15how Prime Minister Modi's diplomacy has helped in order to bring economy or at least keep the
08:22economy on track, as far as the procurement of oil from Russia was concerned. In your opinion,
08:28do you think that this is a victory for Modi's diplomacy? And in times of war, when everything
08:35is going sky high, Prime Minister Modi has managed to at least give those subsidies on
08:42oil or other products and keep the prices under check, no matter it is becoming costly in the
08:48global market? Pankaj ji, I would definitely put a good word as far as Mr. Modi's diplomacy is
08:55concerned. He has been talking to USSR, he has been visiting over there, he has been having a
09:01direct interaction with them. And as far as the foreign minister is concerned, he has also been
09:06talking to them. So I think the government has done a reasonably good job, as far as the import
09:13of crude oil from Russia is concerned. And I think during this situation, if this continues,
09:22India will be definitely benefited. The best part would have been had they accepted the
09:27payment of the crude oil in the rupee terms instead of ruble or dollar. I think that would
09:33have been a real big benefit for India. But this is all, Pankaj ji, with diplomacy is such a thing
09:43that you make the good relations with one person, the other person naturally gets annoyed.
09:50Your dependence on Russia is not seen very favorably, as far as the American bloc is
09:57concerned, or the Middle East is concerned. So these things have got their own price.
10:02But what Mr. Modi has done, has done in the interest of his nation, his country, to get a
10:08cheaper crude oil and benefit the citizens at large. Now, my only request is that these prices,
10:18the retail prices, which are the big deterrent for the people must be brought down, so that
10:24the inflation also gets controlled. Because this diesel transportation for logistics, for
10:32gensets, for the tractors, all these things contribute to the rising inflation as well.
10:38So this should be brought under control.
10:42Definitely. Mr. Srivastava, we have seen that many smaller economies or mid-sized economies
10:48have been hit hard as far as their dependence on the Russian and the Ukrainian supply was
10:54concerned. The global supply chain was also hit because of this war. India has been
11:01putting the money in a way which was meant for other welfare activities, social welfare
11:08activities, developmental work, to this side of oil procurement. Although there are subsidies,
11:16definitely the prices have been kept under check even after the war started. Do you think that
11:24we can cut the Modi government some slack if it is found wanting, say if a bridge is not completed,
11:32say if there has been a lack of developmental work? Do you think that the monetary aspect
11:39stops you from doing these works? It happens sometimes. Because artificially,
11:45if you try to control the prices by bringing down the excise duty or by controlling those
11:51taxes, it's not a good thing to stabilize the economy. Right now, India's economy is on a very
12:00sound footing. You can say your foreign reserve is rising, you are the fifth biggest economy in
12:07the world. But of course, your per capita is on 129th on the world map. But then these are the
12:16things which ultimately bring prosperity to the people of the nation. So the government must see
12:23to it that their balance is exercised. It does not happen that the by bringing down the prices,
12:30the economy goes out of hand or prices of the other commodities shoot up or the infrastructure
12:37development, lot of infrastructure development has taken place in last 10 years, lot of highways
12:42have been built up, lot of bridges and structures and institutions, the work has been done.
12:50So for that, if the money is needed, some people must sacrifice some of their
12:58what you call comforts. So I think they are in the right direction, they are working it.
13:05But yes, I would definitely as a oil person, I will definitely appeal to the government
13:11that the retail prices should be checked so that you know, people life becomes comfortable.
13:19That's the need of the hour. One final question, Mr. Srivastava, before I let you go,
13:24it's a bigger scenario here. You spoke about inflation. Do you think that inflation is
13:30directly linked to the oil price hikes and how the Modi government has had to prioritize fuel
13:37subsidies? Do you think that was something that remains to be checked?
13:42As far as subsidies are concerned, this government has done a reasonably good job.
13:46I would say from the very beginning, since they came into power, I think they have done a good
13:52job and they have brought down the subsidies to a very great extent. Subsidies are inevitable.
13:58Subsidies have to be there, because you cannot leave the consumer to the brutal market forces.
14:06Somewhere you have to chip in some amount of relief in the form of subsidies so that it
14:14stays, you know, the social fabric of the nation is also not damaged. I recall that this
14:24kerosene used to sell at a very low price by purposefully giving a lot of subsidies on it,
14:33which have now been taken off to a great extent and the prices are stabilized. As far as LPG also,
14:39you have seen that the prices have now, the market prices of selling cylinder for 800 rupees or so,
14:47I think it has brought down some kind of a relief. So the government should exercise the balance so
14:53that, you know, the things do not go out of hand and the private players are not able to
14:59exploit the consumers by raising the prices. Right. Mr. Ravish Rao, thank you so much for
15:06speaking to us, for enlightening us and also telling us how this whole system for the fuel
15:13procurement, the price and the energy sector functioning, how it happens. Thank you so much
15:19for speaking to us. Thank you very much. Thank you, Pankaj. Thank you.
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