Tuesday, June 28, 2011


The Government of india finally implemented a long overdue price hike in diesel, LPG & Kerosene.

Even as inflation statistics continue to remain uncomfortably high, the government had to finally bite the bullet!
The government must come up with a long term viable pricing policy for petroleum products.
The Oil Marketing companies like BPCL, HPCL & Indian Oil cannot afford to keep subsidizing retail fuel prices. Currently their profitability is dependent on Oil bonds - a government handout!
Upstream marketing companies like ONGC & GAIL are helping the government to bear the losses from under recoveries, and this is preventing them from investing in Oil Assets and building Oil & Gas infrastructure like gas pipelines etc
The government will also have to step up investment in public transport infrastructure like metro rail projects & urban bus transport networks. Perhaps such a move will help reduce traffic congestion and in the long run reduce our heavy dependence on petrol and diesel.
Lastly I would like to point out that a large chunk of the levied retail fuel price on fuels like petrol and diesel, consists of govenment taxes that does not go to the oil companies, but is a major source of government revenue!
It's time that a truly sustainable long term fuel pricing policy is formulated.
With Crude Oil prices that continue to trade around $100/barrel, the government must come up with such a policy as soon as possible.
Below is an announcement by the Govt of India in the Economic Times on the 27th of June 2011.

Wednesday, June 15, 2011


The months of June to early September have traditionally been months when Gold has witnessed sell offs.

Below is an excellent chart prepared by Mr P. Radomski of Sunshine Profits.
Do stop by his Sunshine profits site for some really insightful analysis on precious metals.
LINK:Sunshine Profits Tools for Effective GOLD & SILVER INVESTMENTS ...

Gold is testing the upper resistance line in the chart below.

I would avoid buying in at the current juncture but would instead await better opportunities over the coming months. An equity market sell off is likely to trigger a big correction in precious metals.