Indian Oil Case Study Essay

3392 Words Jun 30th, 2013 14 Pages
World Economy

anagement’s discussion & analysis

(Forming part of the Directors’ Report for the year ended 31st March 2010) INDUSTRY STRUCTURE & DEVELOPMENTS

During the course of the year, international economic conditions exhibited a marked improvement with the global economy getting into an early recovery mode. The vital statistics of the engine of the world economy entered the positive territory. After June 2009, world trade flows entered into an expansionary mode after declining for several months and GDP growth turned positive. A corrective policy action on both fiscal & monetary fronts has been at the very core of the recovery witnessed. However, the recovery process has not been uniform and has varied in speed & strength
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Along with this, the resurgence of portfolio capital flows since the first quarter of


2009-10 with a net FII inflow of Rs. 110.8 thousand crores after a stark reversal witnessed in 2008-09, when there was a net outflow of Rs. 48.3 thousand crore, set the capital account back to normal. This was further bolstered by buoyant FDI inflows. However, poor agriculture performance; surging food inflation (which is feared to lead to a generalized increase in inflation), fiscal imbalances and innate infrastructural weaknesses of the Indian economy are seen by experts as the key risks to the robust growth and stability of the Indian economy.

the relatively low capital & operating costs in India will help position the country as a refinery hub in Asia especially catering to the export demand of high growth centres in South East Asia. Under the pricing & subsidisation policy, domestic consumers were being protected from rising crude oil prices with an incomplete pass through. However, an expert committee under the Chairmanship of Dr. Kirit Parikh recommended the complete decontrol of MS & HSD prices and replacement of oil bonds by cash subsidy for under recoveries on LPG & SKO. The Government of India decided, on 25th June 2010, that the pricing of MS & HSD both at the refinery gate and the retail level will be market determined. While MS has been fully decontrolled, the price of HSD is expected to be fully

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