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spacebar @ksagga
, 14 tweets, 9 min read Read on Twitter
In continuation of the the quoted thread which discusses blame game of Petrol prices, this thread is dedicated to a strange anomaly of India exporting petroleum products and analysis of who benefits from it.
Pl read

@sanjayuvacha @rupagulab @Nidhi @paranjoygt @IronyOfIndia_
These are the petroleum refiners in India-

Note the two largest refiners
1. IOCL- 68.7 MMTPA
2. Reliance- 68.2 MMTPA
These are the exports from the two leaders

IOCL annual has been bw 3.5-7 MMT
While Rel quarterly exports are around 10 MMT
(might have come down slightly later but still the difference is large)
You must have seen the first pic floating around on Twitter. @rssurjewala also mentioned it.

Ok, that hurts. But, let's understand the game more deeply.

See the second pic. It is more important.

Margins on exports are higher than for domestic supply. Note that.
India being geographically closer to West Asia will have even higher margins simply because of lower freight cost while importing.

Just look at the pics - Reliance's oil products exports have led to major gains.

Note higher GROSS REFINING MARGINS as admitted by Reliance itself.
So we now know Reliance exports a lot and benefits from it. PSU oil companies also export but much less than Reliance.

Let's go further.

Reliance Jamnagar refinery complex is in a SEZ which comes with a host of benefits (pic 2) including tax benefits. So the profits are high..
Furthermore, India's Foreign trade policy also gives some benefits 👇👇 to oil products exporters of India.

So it requires no mind at all as to WHO BENEFITS from all these incentives.
But the game is not over here. Actually my point starts here, please read further.
Agriculture suffers from huge variations of prices. Oversupply in one season leads to poor prices which leads to low production in next season and subsequent high prices. So technically, the farmer should benefit at least in the season of high prices.
But the answer is a BIG NO.
In a season with low production, govt restricts the exports so as to enable sufficient domestic supply so that domestic prices are not too high. This is done by ensuring a pretty high MINIMUM EXPORT PRICE (MEP) and quantitative restrictions so that the farmer can't export.
This means that the govt takes care of the consumer when it comes to treating Agri products as necessities but not when comes to Petrol and Diesel.

But the fact is that Essential Commodities Act recognises both the above categories as essential to some extent....
Now please think...while the restriction on exports benefits consumers and hurts farmers in the case of Agri products, the lack of restrictions and provision of incentives (along with heavy duties on domestic consumption) in case of petroleum products benefits mainly Reliance...
If you have survived this thread so far, then please comment-


I love this 👇👇 quote on democracy that you might have seen in my other tweets as well...

Thanks for reading the thread.
PS- I understand that petrol and Diesel consumption are quite price inelastic but all I want us govt to at least restrict exports (or impose taxes on exports) so that the money could be used to reduce excise duties for the commoners.
A thread to on analysis of cronyism leading to high petrol prices. Please read..

@sonaliranade @ajit_ranade @meerasanyal @pujamehra @rohini_sgh
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