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The saga of fluctuating oil prices: Every drop is govt’s achievement, hike is blamed on international fluctuations

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By Harshmeet Singh

Right before the recent Delhi elections in February this year, the BJP, boosted by its success in the Lok Sabha elections and the state elections of Maharashtra, Haryana and Jharkhand, went all out to list its achievements in huge billboards across the National Capital and national newspapers. Among its ‘glowing’ achievements was “The Modi Government has been able to reduce the price of petrol by close to Rs 15 per litre!”. While the suggested drop in price was actually real, giving its credit to the Indian Government couldn’t have been any farther from the reality. For a country like India, which imports close to 75% of its crude oil needs, the prices of petrol and diesel are far beyond its control.

Prices of oil in major oil importing nations depend upon the international oil prices. These international prices, in turn, are mostly dependent upon the demand and supply mechanism. Any change in the equilibrium between the demand and supply, either way, can result in significant alterations in the oil prices across the world.

 Then why did the crude oil prices actually drop?

In June 2014, the Brent crude oil was being traded at $115 per barrel. In comparison, the price plummeted to $49 per barrel at the end of January 2015. This sharp drop in price was in stark contrast to the sky rocketing prices since 2010. A number of factors contributed towards the earlier soaring oil prices on the global stage. Countries such as China and India, in order to fuel their growth engines, turned into heavy oil importers, whereas conflict in Iraq meant that the supply of oil in the global market took a major hit. With the demand running higher than the supply, the prices showed a major spike.

Right from 2010 till the mid of 2014, the global oil prices hovered close to $100 per barrel. These high prices forced many companies in the USA and Canada to take up oil exploration in their own countries. The next year saw the major economies in Europe, Asia and the USA slowing down which resulted in weakening demand of oil. A number of newly introduced fuel efficiency features also meant that the demand of oil slowed down and came in line with the supply.

The USA’s success in extraction of Shale Gas has also resulted in a sharp increase in the global oil supply. The US produced close to 2.02 trillion cubic feet of shale gas in 2008, which was a 71% increase from 2007. In 2009, the production grew to 3.11 trillion cubic feet. Picture this – Since 2008, the USA has additionally contributed close to 4 million barrels of crude oil every day to the global market.

Although the production in USA boomed in 2008 itself, its impact wasn’t visible in the global oil market until recently. This was majorly due to the ongoing civil war in Libya and economic sanctions on Iran. These factors, combined with the threat that Iraq was facing from ISIS, meant that over 3 million barrels of crude was taken out from the market every day.

By the end of 2014, these conflicts and sanctions settled down. This resulted in the global oil supply overhauling the demand comprehensively. China and Germany, Asia’s and Europe’s most robust economies for a while, also started to slow down. Resultantly, a huge quantity of oil was stored for later use since there were no buyers. This resulted in crumbling prices in September 2014 (co-incidentally, Narendra Modi took over as the Prime Minister at the end of May 2014!).

With the oil prices crashing down, all eyes were on OPEC (Organization of Petroleum Exporting Countries) to see if they would cut their oil production in order to restore the supply and demand equilibrium in the global market. OPEC is responsible for close to 40% of world’s oil production. When the OPEC countries met last year in November, they decided not to cut down on their production, hoping that USA would bend down on its shale gas production since the prices are crashing down. The USA, on the other hand, had multiple motives behind not cutting down shale gas production. Saudi Arabia, a dominant OPEC member, was against cutting down the production due to its past experience. In 1980s, during a similar fall in prices, Saudi Arabia decided to cut down on its production, and, in turn, lost a considerable market share. And a rather lesser known fact is that Saudi Arabia, with its $750 billion foreign exchange reserve, is capable of handling a few hiccups in order to beat its opponents.

Moreover, it is a well established fact that extraction of shale gas is a much more expensive process than the extraction of oil in countries like Kuwait and Saudi Arabia. But when it comes to deep pockets, there is hardly anyone capable of competing with the USA.

Why didn’t the USA cut down its Shale gas production?

Ever since Russia annexed Crimea from Ukraine, the west, led by the USA, has been at cross-swords with Russia. The USA has also imposed multiple sanctions in order to destabilize the Russian economy. Russia is one of the largest oil producers in the world. Its economy and annual budget, like most of the OPEC nations depend highly on the oil export. The USA, with its booming Shale Gas production is looking to decrease Russia’s share in the global oil markets.

Oil and defence are the two main drivers of the Russian economy. Close of 45% of Russia’s annual budget is funded by Oil export. With the global oil prices plummeting, Russia turned towards its defence deals to ensure that its already slowing economy doesn’t crash. Russia’s defence deals with Pakistan, which were highly objected by India, must be seen in this background. With oil prices coming down continuously, Russia isn’t left with many other options but to look for new buyers of its defence equipments.

How long would the oil prices stay low?

With motor vehicles becoming more efficient with every passing year and very few economies looking at a boom in the coming years, the demand for oil may not rise extensively for quite a while. But a conflict in one of the oil producing countries can surely create a mismatch between the demand and supply of oil. The future global events would drive the oil prices in the coming years.

What fluctuates the Oil price in India?

Oil prices in India are based on the global prices and the taxes levied by the Central and state Government. Different states levy different taxes on Petrol, which is why the petrol rates are different across the country. Goa is well known for selling the cheapest petrol in India. In 2012, Manohar Parrikar, the erstwhile Goa CM, reduced the VAT on petrol from 22% to just 0.1%! This slashed the price of petrol from Rs 65 per litre to Rs 54.96 per litre. Goa is, in fact, the only state where petrol sells cheaper than diesel.

The Central Government, on the other hand, seeing the global oil prices drop, increased the import duty on crude oil to 7.5% from the existing 2.5% in December last year. Interestingly, this was just 2 months before the Central Government was patting its own back for bringing down the oil prices in India!

Recently, the Government hiked the price of petrol by Rs 3.96 per litre and diesel by Rs 2.37 per litre, citing International fluctuations. It is actually amusing to note that the drop in prices is attributed to the Government’s achievement, where as a hike in prices is blamed on international fluctuations!

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Rise of PM Modi and roar of subversive forces

To counter PM Modi opposition leaders are desperately getting aligned with anti-India forces

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Narendra Modi
Prime Minister Narendra Modi (Wikimedia commons)

– By Salil Gewali

If your son makes friendship with the difficult and longtime enemies of your own family/clan then how do you describe him and how do you feel about your future? Will it not be likely to open the door to countless tragedies? But in India, such thing is now being openly celebrated. For past couple of years or more the political leaders of certain parties have been taking the wrong step forward in having closed-door meetings with the leaders of Pakistan/China. What transpires among themselves is obviously against the present government and the nation’s fundamental ethos. Those leaders have often been heard to be sympathetic towards the terrorists or those who “roar against the nation” or against its patriotic values. Yes, those leaders jump forward to defend them who wreak havoc with the “peaceful citizens”.   Some leaders are apologetic that certain NGOs/media/religious bodies should not be harassed in the name of fighting the terrorists and ISIS. This is how country’s leaders defend the dangerous postures of dangerous outfits. Will this trend not invite greater troubles to the nation in future?

One wonders how the apex judiciary of the country just allow the political parties to pour out their pent-up anger before the leaders of neighbouring countries who are always aggressively in the combative mood. Why is the Supreme Court silent on such blatant subversive activities?

Very recently, one senior leader of the national party even scoffed at Prime Minister Modi by calling him a depraved being “Neech”. What are the criteria for one being morally low? Has PM Modi fallen short any standards of the integrity since he works sincerely hard and formulates innovative plans and schemes for the greater welfare of the nation? Well, has he not been constitutionally elected by the people of this country? Why the media is less aggressive and more defensive for those “transgressors” who wield daggers behind the cloak.

Whatsoever be the political dispensation at the center, such open rebellion against the government will not augur well for the nation and its 1.25 billion citizens.

Salil Gewali is a well-known writer and author of ‘Great minds on India’. Twitter Handle @SGewali

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Beatles, Apple, Facebook knew India more than Indians

Famous non-Indian celebrities know more about India and its past

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The Beatles once visited India to know more bout its past and culture.
The Beatles once visited India to know more bout its past and culture. Wikipedia

-By Salil Gewali

Facebook’s Chairman Mark Zuckerberg had dropped a bombshell on the “secularists” in India during PM Modi’s visit to his campus in California. It’s all about the Facebook connection with India. Initially, it was never a bed of roses for what is now a household name “FACEBOOK” across the world. This world-famous ‘social networking service company’ had its own share of bad times. Revealing for the first time in the meeting at the Facebook office upbeat Zuckerberg told PM Narendra Modi that Steve Jobs, the founder Chairman of Apple, had advised him to visit a certain temple in India for blessings. The revelation may have caused heartburn to many. More so in India where so-called secular and snooty folks have long acquired a proclivity to look down upon their own culture, religion, and values while being appreciative of any bizarre customs and styles of the West. Yes, heeding the advice of his mentor Steve Jobs the depressed Mark had visited the temple and toured around India for nearly a month.

Facebook's CEO tells about India.
Facebook’s CEO tells about India. wikipedia

Well, the American techno-wizard Steve Jobs had himself spent over six months in India in 1974. He was here in quest of the higher meaning of life and spiritual solace. As understood, from early age Steve was quite haunted by a good deal of unanswered questions. Of course, his encounter with a book “Be Here Now” by Richard Alpert, a Harvard Professor, had opened up a gateway to the spiritualism of the East. This book had also introduced him to a mystic Yogi ‘Neem Karoli Baba’. That later inspired Steve to set out the journey for the East. As soon as Steve and his friend Daniel Kottke arrived India they directly went to meet the Guru in Kainchi Dham Ashram in Nainital. But to their disappointment, they found the Baba had already passed away some months earlier. Nevertheless, the urge to dive deeper into the spiritualism did not die away. They shaved their heads and put on Indian clothes and undertook an extensive meditation and yogic practices.

The most significant impact that had made upon Steve’s life was a book “Autobiography of a Yogi”by Paramhansa Yogananda. It is on record that he would read this book too frequently, at least once every year until his death, 2011. This book had given him the practical insight into what exactly this world is about and how a layman can prepare himself to realize the Supreme knowledge. The first-hand account of a Yogi with empirical approaches to know oneself this book by Yogananda is a smash hit manual now among the seekers of the Eastern spiritualism.

Yes, by dint of hard work, intuition and innovation Steve stood out as one of the most successful techno-tycoons of the modern times. As much known, Jobs was hardly possessed by the luxury of riches and materialistic vanity. He just regarded his entrepreneurship as a tool to awaken his dormant potentialities. The chairman of Salesforce.com and famous philanthropist Marc Benioff says with conviction — “If you want to understand Steve, it’s a good idea to dig into ‘Autobiography of a Yogi’.” It is this book which Steve’s family had given to all the guests as a last gift at his memorial service.

Here we can’t afford to ignore the Beatle’s fascination for INDIA as well. The band members that were basking in the opulence of materialistic riches and glory visited India (Rishikesh) in search of inner peace. They met with Sri Maharshi Mahesh Yogi and learnt from him Transcendental meditation (TM) who laid bare methods to feel true bliss within. Sri Maharshi is a big name in the West having a huge following that includes celebrities like Oprah Winfrey, David Lynch, Russell Brand, Hugh Jackman, Jennifer Aniston, Modern physicist Dr. John Hagelin, to name a few. The Beatle’s Paul McCartney and Ringo Starr often assist a Hollywood Director/actor David Lynch to organize the Transcendental meditation under ‘David Lynch Foundation’ across USA and the European countries. George Harrison later took refuge in Bhakti Yoga. The founder of ISKCON Srila Prabhupada showed him the pathway to the Supreme Consciousness.

What basically pulls the rational westerners to India is less known to Indians themselves. It’s shamefully paradoxical. From early 19th Century, the philosophical literary treasure troves and Yoga of India found more admirers in the foreign lands than at home. Indeed, the philosophy of the “laws of karma” and the presence of all-power-divinity within every being and everywhere — which any human being can realize irrespective of one’s caste, creed, nationality, and color, has intensely stirred the greatest of the great minds of the West. The ancient texts hold out a whole bunch of keys to unlock oneself and know his/her relationship with the Supreme Being which in fact seems very reasonable to the West. Further, the complex studies of world-view by Modern scientists are gradually arriving at the same conclusion what the ancient sages of India expounded over five thousands year back that ‘creation and creator are ONE’. Interconnection, inter-relation and interdependence among every individual particle/object, living or non-living, in the infinite universe — which is the fundamental tenets of the Eastern philosophy, provided a new light of wisdom to the the modern physicists like Schrödinger, Heisenberg, Julius Oppenheimer, Brain David Josephson, David Bohm, John Stewart Bell et al.

Well, Indian’s contribution to the western academia is immeasurable — though deliberately undermined or less discussed in India itself. It’s very worthwhile to recall a famous proclamation by our western master whom we hold in the highest esteem. TS Eliot, one of the most celebrated poets of the 20th century, asserts: “Indian philosophers’ subtleties make most of the great European philosophers look like schoolboys”.

Salil Gewali is a well-known writer and author of ‘Great minds on India’. Twitter @SGewali.

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Narendra Modi App : Amazing Platform where Prime Minister connects with the citizens

Wanna give ideas to or interact with Prime Minister Narendra Modi? Go and download Narendra Modi app on android and iOs

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Narendra Modi App
Prime Minister Narendra Modi (FILE PHOTO)

Indian Prime Minister Narendra Modi has an amazing sense of connecting with masses. Prime Minister knows the nerve of Indian public and at various instances proves himself as a pan Indian leader. Prime Minster Modi is undoubtedly one of the most tech-savvy global leader and a big promoter of e-governance and m-governance since a long time. Within two months of assuming Prime Minister-ship, he had launched the ambitious myGov project. In continuing the tradition of citizen connect, Prime Minister Modi took another step towards connecting with the people at their convenience by launching Narendra Modi app couple of years back.

Narendra Modi app
Prime Minister launching Narendra Modi App

The Narendra Modi app provides updates on the day-to-day activities of Prime Minister Narendra Modi. It presents an opportunity to receive messages and emails directly from Shri Narendra Modi. There is also an option to contribute and earn ‘badges’ through to-do tasks in various social initiatives. Through Narendra Modi app, one can tune-in and listen to the various episodes of ‘Mann ki Baat’, read Prime Minister Modi’s blogs, and get to know more about him from his Biography section. Narendra Modi app also provides comprehensive information on initiatives and achievements of the Union Government, which has an ‘infographics’ section for insights.

Such type of initiative by a global leader gives a strong message how technology can be used by governments to bridge gap between leaders and citizens. apart from this app Prime Minister Modi is also very much active on various social media platforms such as Facebook, Twitter, Instagram etc. Prime Minister Modi is the one of the most followed global leader on Twitter.

So what are you waiting for. Go and share some ideas of innovation with Prime Minister Narendra Modi and contribute in his vision of “Sabka Sath, Sabka Vikas”.

– by SHAURYA RITWIK, Shaurya is Sub-Editor at NewsGram and writes on Geo-politcs, Culture, Indology and Business. Twitter Handle – @shauryaritwik