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