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