Indian Oil Companies are in crisis

The world markets and companies are fluctuating with the changes in oil prices. OPEC members are trying to moderate production and demand. But none of these facts are going to affect the oil prices in the Indian markets. Indian oil corp. ended this quarter with $211 million loss. Hindustan Petroleum (4.31 billion rupees) and Bharath Petroleum (3.48 billion rupees) also bore losses this year. The oil company's shares fell below 6 percent in these 9 months in India.

The Indian government did not allow the companies to raise the oil price when it reached a high in the global markets. Crude oil went up to a record high $78.40 a barrel in July but this increase could not affect the Indian customers.

The government limited the fuel price increase to 15 percent last year when crude oil costs rose 40 percent but the government provided subsidies to encourage the state-owned refineries and it also compensated with bonds worth 280 billion rupees to help them. State-owned refiners have been allowed to raise fuel prices by about 7 percent since Jan.

The Indian Government is trying to expand its economic growth and its following some policies to protect economy as well as inflation. But the oil companies are becoming more uncertain with these policies. These are moving from profits to losses irrespective of the price changes in the markets.

The Indian Prime Minister Manmohan Singh , is to control the inflation, he is not imposing any burden on the poor. The government is giving a big hand to privatization, FII’s and Foreign Direct Investments. On the way towards growth of the Indian Economy the oil companies are passing through such barriers.