The
government of India is having a majority stake in the Oil marketing companies
(OMC). But these companies aren’t doing well. Is it because the government
controls it? The answer lies within the question. Hit by High crude prices,
excise duty, under recoveries are the main reason for downslide of OMCs.
Look
at this! Many retail investors are
investing in these OMCs. Since the government is having a majority stake in
these companies and due to political compulsions, prices at which they sell
their products are not in line with international prices, these OMCs are forced
to go in to losses in order for the government to survive at the centre.
It’s
completely ridiculous. By having larger
stake, government cannot take the other stakeholders concerned with these OMCs
for a ride. They have to consider the interest of shareholders. Shareholders
are not getting the appropriate returns, as they should receive, like any other
listed company. So what’s the whole point of having these companies listed? Why
not delist them if they their performance is restricted in order to save the
government and its vote banks. Or is it because the government is dictated by
one person?
The
ultimate aim of government is to provide petroleum and its products at a lower
rate to the common man. Though Petroleum prices have been de regulated, but the
government is still controlling it. Why is it that we still see oil companies
want an increase in prices of petrol, but they are not able to increase it at
the same time? Decontrol is only for namesake. But if the GoI is seriously
concerned, then they should deregulate the prices and let the market decide it.
Else if they want to go on with the existing policy, its better they delist the
OMCs. What the point of having these companies listed, if they can’t generate
profits and are give returns to the stakeholders involved. Banks, investors, suppliers and many more are
involved. We cannot let OMCs be the next Air India.
These
issues need to be addressed and a quick decision needs to be taken soon.
To add further,
ReplyDelete1. one side government wants to increase prices and on the other side it gives subsidies for the reduced price at which the OMCs are selling the fuel.., what s the point of doing 2 things which gives ultimately no impact..., the hidden fact is selling fuel at a reduced price is fact and getting subsidies from govt is like illusion..
Neither it helps OMCs nor the society
2. The indirect taxes what the government levy in form of VAT is absolutely astronomical...
atleast other states shud take goa as example....