Friday, June 28, 2013

AND NOW GAS AT 8.4 $/ mmBTU - WHAT FOR????

And now the gas at 8.4$/mmBTU. The Indian government bites the bullet on gas pricing, so go the headlines in Indian press. What for and to whose advantage? The gullible, ploy-able intelligentsia with unabashed commitment to anything  pro establishment has not even bothered to look into the nitty - gritty of the policy pronouncement before singing praises of the action of raising the gas price to nearly double the present day price.This only means that the subsidies to power and fertilizer plants as also to cooking gas sector will have to go up substantially and the public sector companies provide for these subsidies. The end result of this exercise for public sector companies which hold majority of gas reserves of the country is going to be diluted drastically.It is only the private sector companies who are going to hog fully the benefits of this windfall.
The nation was once again fed on the often repeated talk about country's need for energy giving fossil fuels like gas, coal etc to fulfill its huge requirements of power generation to give impetus to its sagging growth rates.What is surprising is that the solutions to increasing production of coal and gas has been diametrically opposed to each other. In case of boosting of coal production and power generation subsequently it was suggested that coal allocations should be done almost free of charge to provide incentives to enhance coal production and produce cheap power for rapid industrialization of the nation. And now for increasing gas production, the decision is to double the cost of gas while the aims are the same i.e. quick additions to gas capacity and providing cheap power for rapid industrialization. Now we are being told that higher cost realizations by the vendors will be value additive to the government exchequer. Could any of these buffoons in Khadi belonging to the ruling polity make the nation wiser as to how a similar action in coal allocation could have been value depletive to the exchequer.
Why such a bright game changing idea was kept on hold for all these years and has been brought in just before the elections. Equally surprising is the fact that this long term measure to boost the investor confidence and alluring multinational companies to make investments into this sector of prime importance with an open and coherent pricing policy is valid only for five years and again has to be reviewed before the next elections.
For what? Your guess is as good as mine. and again what a game changer!!! These wise men with all their theories and thinking expect that exploration to exploitation to value addition will all fructify in a span of five long years both for the investor and the nation and an investor who spends his own money will bite the bullet on their face value.Heard from many of them that they are finding it difficult to convince the investors to flock to India and participate in the Indian growth story. Yes the investor who has to pump in his own hard earned money is not convinced about the sincerity and long term vision and coherence of Indian policies. The Indian polity is capable of sacrificing everything at the altar of vote politics and self.