People Are Complaining About Petroleum Prices
I need your perspective on this because even your money is involved here. I was just watching the news and I saw one guy from Congress wearing white Kurta, lying on the ground and behaving like a child. And the one police is busy dragging him towards the van. And this guy is protesting against this fact that why is the current government not reducing the price of petrol and diesel because in the international market, the price has gone down.
In the international market, the average cost of petroleum crude oil is $65 per barrel. In simple words, 28 rupees per liter, but currently looking at what is happening in the world under lockdown, it is 18 rupees per liter. A difference of 10 rupees.
Indian Market Scenario
Now in India, we use 48 crore liter petroleum every day. So even if you save 1 rupee in buying, 48 crores, 10 rupees, we can easily save 480 crores. By the way, we import 82% of petroleum. We spent a huge amount on it. Just last year, in 2019 we spent $111 billion on petroleum. In simple words, 9 lakh crore. It has contributed 25% of our import bill. Now the moment I said these big numbers you will say “Praveen. No, that 10 crores, this crore,” — Boss, it’s your money. It’s my money. It’s our tax money we are paying. So why are we not able to take the benefit of this situation? Is BJP or, is Mr. Modi so bad at calculation?
It’s not like that. No, it doesn’t matter which government is running this country. At this point in time, we are not in the position to buy petroleum. Why?
Simple Explanation With Example
Understand this from a simple example. Imagine for a moment, someone telling you that in the market today, milk is available at a 90% discount. How much will you buy? How much you will buy is based upon your ability to store. If we don’t have a fridge, we’ll buy less. If you have a small fridge, you will buy a little more. You have a big fridge. We’ll buy a little more. Depends upon your ability to store. You cannot just buy milk and keep it, right?
Same with petroleum. Your ability to buy petroleum from the international market is based upon your country’s ability to store. There’s an agency called International Energy Agency, I.E.A. They have highly recommended to each country, especially keeping that 1973 Gulf oil crisis in mind, that understanding petroleum is very important for every country.
It’s just not about vehicles, even for your manufacturing industry, the chemicals derived from petroleum are required, even to cook food, we need LPG gas. That is petroleum. When we fly that aviation turbine fuel, which is the purest form of kerosene, Kerosene is petroleum.
So, petroleum is required for a stable economy. If the government, if they’re really caring for people, they have to take care of their petroleum reservoir. So, they’re recommending something called SPR, Strategic Petroleum Reserve. Just like your fridge, your fridge is your reserve.
So, when the world is on lockdown, you’re putting everything in the fridge. Now you have to understand what is the capacity to store.
India In Consumption Ranking
Let’s understand this also. From the wind consumption point of view, we are at number four. If you are number four in the world from a consumption point of view, then we should have that much capacity also. Let’s understand this. Number one is the U.S. The U.S. is using 19 million barrels every day, but their capacity is 800 million barrels. So, divide 800 by 19, how much? 42 days of reserve. What do you mean by that? Tomorrow, if Gulf countries are not giving petroleum to the U.S., the U.S. will say, “Okay, we can survive.” And I’m very careful using this word, survive, for 42 days.
Second is China. Highly industrialized, big country. They have 11 million barrels per day of usage, and then the capacities are around 550 million barrels, 50 days.
Third is Japan. Amazing small country, highly developed. Consumption is only 4 million barrels, but the capacity is 500. It means what? Almost for 4 ½ months. 4 ½ months, they can survive without any supply of petroleum.
We Rank 4th
Come to India, consumption 3 million barrels, still fourth. We are number four. Then consumption is only 3 million barrels, but capacity is only 36 million barrels. We have only three SPR, Strategic Petroleum Reserve. One we have in Visakhapatnam. One more we have, there’s a place called, I think, Mangalore and then we have Padur, which is the biggest. Padur has 15 million barrels. But if you combine — this is 36 million barrels. Divide 36 by 3, how much? 12 days of storage we have. That’s it.
We are a developing country. We feel proud about it. The most important energy resource we have only for 12 days. So, if tomorrow something happens, if Gulf countries say that “We don’t want to give you”, we will be unstable. What do you mean by that? You can’t cook food. You can’t drive. 12 days. That’s it. Now you will say “Praveen. There are refineries also.” Yes, we have refineries. We are very good at refineries. We have almost, I think, 23 refineries out of which 5 refineries are private. What do you mean by that? If you take these 23 refineries, the top three refineries are private. One is of course the Jamnagar Reliance, which is the biggest refineries in the world. And one more we have from Reliance is number two, and then we have Navara.
Now these three private refineries, almost hold 30 to 35% of the output of petroleum. So, is the government telling us this, that in case of a crisis, we depend upon private refineries? These are refineries. We also know how private companies behave. The moment they see this increase in demand they will increase the cost.
Can We Depend On Private Refineries?
We are not giving taxes to these private companies. We are giving taxes to you, the government. Don’t you feel it was your responsibility to create enough storage capacity so we can take advantage of this?
Now you’ll say “Praveen. Is the situation so bad?” No situation is not that bad. The current government — I’m not at all pro BJP. I’m just sharing facts with you.
The current government in 2014, I think, Mr. Modi realized that “No, this is very important.” So, they are expanding it. The Padur one, they’re expanding to Padur phase two. So, they’re adding 15 million barrels in Padur two. Then we are starting one more in Chandikhol, I think, in Odisha, which is 27 million barrels.
We are increasing, we are growing, we are increasing, but my point is not that. Right now, it’s not available. You have a fridge, it’s not working. So, your current fridge, what you have, you don’t have a storage-only to buy.
My point is this, when the big people from Congress, when they cry that we are not getting this, and the current government is not behaving, and they’re not like the way they should behave. It is so simple. They don’t understand this fact, why do they behave like this?
My point is that the reason is, this is what I have understood as apolitical person, who is not interested in politics. I’ve understood this, which I have seen in BJP also.
In Bombay, we have Uddhav Thackeray, he does come from a political family, he’s not a politician, but he’s now the Chief Minister, doing good.
Importance of Communication In Politics
Why am I saying he’s doing good? I feel connected to him. The only reason why I like Mr. Modi is because I feel connected. Why? Because there’s communication. There’s some degree of communication.
I completely don’t understand when the chief ministers or ministers do not even communicate. And today we have the resources, today we have the technology to communicate with people. So, they don’t even communicate.
Sometimes they come only for marketing. We don’t want to see your ads. We want to see what you feel, what you’re doing. Don’t show your ads.
Corona Spreads in Dense Areas
So, I feel connected with Mr. Uddhav Thackeray. And I think according to me, he’s doing good. He’s working, he’s trying his best. But no, the people from BJP, from other parties, are behind him. They’re saying that Bombay has the highest number of cases. Apply common sense. Bombay in India is a highly dense city. Take any country, if you have coronavirus, if we just see the number of coronaviruses, we will find that high density — because this is how wide it spreads, we have to maintain social distance. And in Bombay it is very difficult to maintain social distance. Any density, they have a high number of cases.
Go to the US, which city has the highest number of cases? New York. You don’t understand that we cannot buy crude oil at a lower cost because we don’t have storage. You don’t understand that in Mumbai because it is highly dense, that’s the reason we have a greater number of cases.
What About The Media?
Once you understand that you are just so opportunistic to use TV and news to show that “See, this government is not good. We are good. So, next time, when you are giving votes, give it to us.” They don’t even care about people. They just care about votes so that they can rule the country.
Are They Running The Country or Ruling The Country?
Because unfortunately, in India, even if we are free, they believe they don’t have to run the country, they are going to rule the country. And that’s the reason, they behave like this. What do you mean by that? I’ve seen sometimes, one politician going from his home to the airport, and I’ve seen that people or the traffic police have completely shut down all the signals and everything for a clear road. Why?
We have given money to you. It’s your responsibility that every time when I’m going to the office, I should not face traffic. So, you should build enough roads and bridges. You are not suffering with traffic. You don’t want to suffer with traffic. When you are shutting that door, you don’t even think that someone is leaving from his home for the hospital also. You believe that you are ruling the country.
It’s not a monarchy. You are running the country. And if you are really running the country, all politicians, please take care of this country.
If you’re talking about petroleum, instead of making drama on the news channel, think about how to build a Strategy Petroleum Reserve.
Whats Your Perspective As A Public Speaker?
What are your perspectives on this? What’s your feeling about this? As a speak and grow community member?
You know there’s only one way to improve public speaking. That is public speaking.