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The time for it is now Maha merger – a beginning Rural prosperity will propel development Awaiting a new(nu) year(clear)! Piped gas a pipe dream Welcome improvements in coal production Clean energy sector catches up with thermal power A praiseworthy pricing policy Current impasse short-lived… A golden age of gas? Where is Moily’s prophecy of energy independence? Allow market forces to shape destiny One of a kind project... Ending the mother of all corruption A sun-rise industry turning sun-set Huge under-recoveries continue Ambitious goals, uneasy path Why ONGC should pay nothing to buy a stake into GSPC’s KG block path CEA versus CEA Gujarat has 2200km gas grid, TN shuns this! Game changer in unexpected way Anachronism of Asian premium Paying for sins of the past... Riddle wrapped in a mystery Why has it not fallen enough? How prepared are we for the energy transition? Clean energy sector catches up with thermal power The rebirth of the Indo-US nuclear collaboration Dawn of a New Energy Era? A sound energy strategy... Oil sector reform: missed opportunity A small first step towards the state’s solar mission
 
Why has it not fallen enough?
OPEC, and in particular Saudi Arabia, presented an unintended windfall to Narendra Modi’s government by adopting a new production policy somewhere towards the end of 2014.

OPEC, and in particular Saudi Arabia, presented an unintended windfall to Narendra Modi’s government by adopting a new production policy somewhere towards the end of 2014.

This has resulted in a free fall of oil prices: from $110/bbl to less than $45/bbl, and currently above $60/bbl. Instead of supporting a minimum oil price, as they have attempted to do since the last dramatic drops first in 1986 and then in 2009 by controlling production, OPEC went after maximising their market share.  

It is to the everlasting credit of the NDA that it decided not to allow the sharp drop in oil prices to flow through completely to the consumers by increasing central excise taxes four times starting in November 2014. Surprisingly the Opposition did not protest the way they always do against such a non-populist policy.  

The following Chart -1 shows when the crude oil price (based on Indian basket of crude oil price) has fallen by 39 per cent between May 2014 (when NDA came to power) and June 2015, petrol price has fallen by only 7 per cent.

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