The consideration by the oil ministry of the recommendation of BK Chaturvedi committee to have dual pricing for diesel is a step to lessen the pressure on the oil-companies who are incurring huge losses owing to price rises at the global level. The extra-burden of 46% on the Industrial consumers may be too much for them to bear and they may consider passing the same to their customers. However, since most of the industrial consumers are engaged in power-production and their customers are the large grid corporations, the immediate impact is unlikely.
The major gainers of the dual-pricing are going to be the organisations engaged in producing electricity using renewable sources of energy. This decision will be an icing on their cake as they already enjoy huge financial benefits in the form of tax-holidays and the depriciations. The demand for their products is likely to go northward with the increase in fuel costs for the thermal plants. It remains to be seen how the Industrial consumers of diesel - mostly the big guns react to the situation. Who knows, we may find them entering the green world to exploit the available opportunities.
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3 comments:
kool
i somehow beleive this dual pricing model will not be successful in the country. In India oil is heavily subsidized cause its linked to fuel and this vote banks. moreover, the social class and income spread in India makes an upward pressure of 46% unbearable for the middle class..
I think u missed the point. The whole concept of dual-pricing is to differentiate between domestic consumers and the industrial ones. So, the middle class is not at all going to be affected
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