Will Fuel Be At $100/Barrel?

 

I was reading an article called “Swaminomics” in the Sunday Times. The author, Mr. Anklesaria, predicts that fuel prices will be sub $100/barrel by early next year. He justifies it with very economical theory of demand and supply. He points how productions will go up in second part of this calendar year and how demand is fizzing out thanks to sky high prices. The slackened demand is very evident in US and other western in market.

I will love to believe that what he predicts happens, but I have my own doubts about the same. My reasons for the same are two folds.

Firstly, I will agree that the demand is finally coming down to an extent, but as we have seen in past half decade most of the price rise is also because of demand from south East Asian countries rising. India and China are subsidizing the fuel prices excessively and thereby insulating the end user from price fluctuation.

Secondly, the more important reason I believe which will affect the price hike, is the supply. The supply of fuel is not going to increase as proportional to increase in demand. But the point which is more important is because OPEC (Organization for Petroleum Exporting Countries) will never let it happen. In my opinion OPEC runs like cartel, they ration the supply and monitor it so closely that they never let the price ease off. They make sure that oil is never sold in open market conditions, and there by not letting market determine the prices. The simple economics theory of “Less the supply – More prices” is well itched into their mind, and they make sure they never let the supply pressure to ease off and thereby keeping the prices artificially controlled. This in my own terms I refer to Pseudo-Open-Market Economy. It’s nice mid path which can be more or less equaled to “Managed float” for currency exchange.

In essence, I will say that prices might marginally go down, but $100 is just unimaginable.

Politician By choice!

 

 

I was reading an article that most of the last 20 presidential elections nominees in US are educated from premier institutes like Harvard / LBS / Yale etc. The article also rued the fact in India the educated lot are not entering politics.

Well I will agree that most of educated public of India (especially from premier institutes) will not like to enter politics, thanks to its unorganized, unmanaged and corrupt practice. I believe that most of readers might think that these are excuses, to cover up for selfish behavior of young lot who look for greener pastures.

I have one more pertinent question and that is, “Where are the votes??” Just to prove my argument, I will like to highlight this particular case. Last state election in Tamil Nadu saw rise of two parties, one promoted by cine star Vijaykanth and the other promoted by IIT grads. Mr. Vijaykanth had lot of funds which he has earned during his stint on Kollywood, he also had several ministers from all parts of Tamil Nadu, of which no one was greatly educated. The party contested from almost all the constituency available. They had loads of funds so they did huge marketing and promotions.

In sharp contrast, the IIT-ians party was full of highly educated from various fields. They contested only in some constituency in Chennai. They never had great funds so relied only in some moderate promo raising awareness among students / cooperates.

Most media covered both parties, and soon elections came. The results were as expected DMK got most of Votes, AIADMK managing some face saving seats. Vijaykanth’s party won 10 seats. While our much educated parties did not manage even single seat, what was worse that the margin of loses were huge.

So it proves that although we might get educated candidates but making them win and encouraging others follow suit is in our hands. In today’s Indian politics the candidature is not important but votes are.

My answer to the question that when we will have educated candidates only when we have votes supporting them, till then we can just hope that some intellect will gather courage contest election, and we as usual will see same old non-educated to get voted. It’s we (Voters) who have to change and not the candidature. 

Durgapur Expressway; Good Road, Bad infrastructure

Just a week before, I had an opportunity to go to Durgapur – a small industrial town about 150 km from Kolkata. We were travelling in our car and it took us little over 2.5hrs to reach Durgapur from Kolkata, by far a quick journey by Indian standards.

This short journey was only possible because the road, 4-lane expressway, way above any Indian highways. The same journey 7-8 years back would have taken 5-6 hrs easily. Thanks to previous NDA government, India took initiative to connect all its metro by expressway; the project was called GOLDEN QUANDRANTANGLE. Very fortunately, the successive UPA government didn’t shelf the project; a very common case in democratic India where opposition first closes all projects started by previous govt.

Well coming back to the discussion, although the Durgapur Expressway (DE) is quite good, it doesn’t have features, a modern infrastructure should have. Many parts of road are barely lighted; there are no reflectors what so ever. Moreover, the most dangerous one, there are no meridian; what we have is two beautiful strips of road separated by uncultured grass and big hollow channel. On both side of road there are no reflectors, the road is at least 6-10 ft higher that the surrounding, exposing drivers to risk of slipping away from mail road. The danger is so high that buses and trucks can overturn if they are little careless. My fears were answered while returning, when I saw a truck has plunged itself into deep channel on the side of the road, obviously the truck was overturned because of the slide. 

The authorities of the toll way have barricaded both sides of roads, making sure that existing petrol pumps are out of business. So essentially if you driving on DE, make sure you have full tank of fuel.

All the above reason makes me to comment that DE is a great road but for it to be a good world class infrastructure it has to travel long distance. 

Drive safely!

kk