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FALL IN CRUDE PRICE: REPERCUSSIONS IN INDIAThe brisk decline in the price of the “black gold” has changed the course of oil exporting as well as oil importing economies. The reasons attributed to this decline are mainly based on increased competition amongst the producers, economic stagnation in Europe and Asia and geopolitics. This downfall in global oil prices is continuing because of a mismatch in demand and supply. The demand is low as major oil importing economies like Japan and China are facing slowdown. The supply on the other hand, is rising on account of the U.S. shale boom. The leading OPEC member Saudi Arabia, want to negate the increasing supply of shale oil by the USA and build a dominance in the Middle East region by increasing it supplies of oil and thus gain considerable increment in market share in the global oil market. But whatever be the reason of this drop, the Indian economy which is projected to grow at a faster rate in 2015, could not have asked for a better timing of the reduction in crude prices.Impact on Upstream Sector: The sharp decline in crude oil prices as well some of the major reform policies undertaken by the government of India in the oil and sector, such as deregulation of diesel will be a boon for the upstream exploration and production companies in India. ONGC and OIL stand to gain from the abrupt slide of crude oil. ONGC's net realization after considering the under recoveries it provides to oil marketing companies should increase as the subsidy burden is expected to reduce sharply. The upstream companies have been providing for more than 50 per cent of the total under-recovery burden of the oil marketing companies with ONGC bearing the most nearly around 85%. A change of 1$/bbl of crude impacts the under recovery by 1100 crore rupees. Now it can be easily estimated about the impact the $ 30-35/ bbl decline in the price of the crude oil would have on these upstream companies. The under-recoveries had a huge negative impact on ONGC's net realisations over the years. In 2013-14, ONGC's net realisation was around $41 a barrel and given the situation of low crude oil price, it could mean a net realisation of about $55-60 a barrel. Now these upstream companies can easily go for foreign acquisitions of the hydrocarbon reserves and enhance their assets too from these savings improving energy security, which they had been trying for years.Impact on Downstream Sector: India if not a producing giant, is certainly a refining hub where it refines and markets around 220 metric million tonnes of petroleum products. Out of this around 160 mmt are used for domestic consumption while the rest are used for exports. Therefore, the drop in price of oil will be a blessing for the Indian refiners and the oil marketing companies.The price of crude oil has plummeted nearly 30 per cent since June from $109.05 per barrel to $77.58 per barrel for the month of November and is still maintaining the downward momentum. Despite this steep slide in the price of crude oil, retail prices of petrol and diesel are not declining at the same pace as the reduction in price of crude. The transport fuel consumers are paying only 8.32 per cent less for diesel and 11.31 per cent less for petrol than on June 1. This is because the government has imposed a higher excise duty on these fuels, generating a revenue of Rs.15,000 crore this year and the oil marketing companies therefore have started improving their profitability and refilling their coffers which were empty till now. The sharp decline in crude oil price also helped the government to deregulate the price of diesel and thus reduce a huge burden of subsidy on the exchequer. Impact on India’s Macro-economy: The reduction in fall in global crude prices has a favorable impact on India’s macro economy, setting off multiple growth boosters. The most obvious positive impact is the lowering of inflation. Wholesale inflation growth could slow down as well as consumer prices will ease too. Fuel costs savings would lead to an increase in discretionary spending as well as lower input costs will also add to profit margins for businesses. This would help the companies to revive the stalled projects or reinvest in new projects thereby generating new jobs and growth.The generation of extra revenue and savings on subsidy will reduce the fiscal deficit for this year and help the government at the Centre to achieve its Budget target of 4.1 per cent of the GDP. ). India’s petroleum subsidy burden was around 1.37% of the GDP which is expected to reduce further in 2014-15. Since India imports more than 75 per cent of its oil consumption, deflating global crude prices could improve our Current Account Deficit by up to $40 billion from the $30 fall. It is estimated that if crude prices decrease by 1 $/bbl the net import bill decreases by Rs. 8,345 crores ($ 1.38 bn). This in turn will help India to grow its forex reserves too.Impact on other sectors: The government and the oil marketing companies (OMCs) are not the only ones to gain from the declining petroleum prices. There is a huge positive impact expected on the other sectors too such as automobiles, aviation, railways, chemicals and fertilizers, agriculture etc. Indian Railways consumes around 270 crore litres diesel annually and therefore would save around Rs. 5,000 crore on diesel bill in the current financial year. The price of diesel for bulk consumers, including Indian Railways, have come tumbling down by 16 per cent to Rs 50.51 a litre since June. Similar is the case of the aviation sector. Airline carriers spend nearly 40-50% of their operating costs on Aviation Turbine Fuel. The price of ATF was Rs. 62537.93 as of November 1, 2014 which slid around 10.33% from Rs. 69747.98 in Delhi on June 1, 2014 which itself indicates the relief it would have given to the struggling airline carriers. The automobiles sector will also gain as the businesses can boost their sales due to low price of fuels as well as its accessories such as tyres, as their raw material are directly linked to the crude prices. Other derivatives of crude used such as in paints, packaging materials will get good acceleration in sales thus contributing towards growth in the Indian economy.Concerns over Adverse Impact: Although the bigger picture looks good, there are some foreseeable downside to the emerging oil story for India. The drop in crude oil prices has created a lot of uncertainties in global markets and can adversely impact the global stock markets, including India. Low crude prices are threatening growth in several oil-producing and exportingeconomies like Russia, Saudi Arabia, Nigeria, UAE, Qatar, or Kuwait etc. and this can have serious repercussions for India's foreign fund inflows as well as exports. A cutback on demand from these countries does not bode well for the trade deficit. The amount of investment by foreign investors was around Rs 2,18,512 crore ($ 35.8 billion), including Rs 82,266 crore (around $ 13.48 billion) in equity while the rest in debt which was one of the major reason for the Sensex rally this year. It is feared that FII inflows are likely to reduce as sovereign wealth funds put in by oil exporting countries are likely to cut down their funds for such investments because of less earnings. This could be a major blockade in the progress towards growth and hurt the economy severely. There is also a huge non-resident Indian population in the Gulf. Their incomes could be affected if these oil-producing countries are hit. This might reduce remittances from them to India too.All this being said, India would certainly reap the benefits from the collapse in price of the crude oil till now. The concerns over global slowdown in demand may have a negative impact but India can overcome this sluggishness and maintain an upward momentum. The new government at the Centre has restored faith in the Indian economy for the foreign investors and it is expected they would continue investing here. Therefore, the decline in the price of crude oil has certainly propelled India’s growth towards accelerated progress. India have a golden opportunity to make hay while the sun shines bright.Note: All the data mentioned have been sourced from the official government data on the website of Petroleum Planning & Analysis Cell (Ministry of Petroleum and Natural Gas

FALL IN CRUDE PRICE: REPERCUSSIONS IN INDIAThe brisk decline in the price of the “black gold” has changed the course of oil exporting as well as oil importing economies. The reasons attributed to this decline are mainly based on increased competition amongst the producers, economic stagnation in Europe and Asia and geopolitics. This downfall in global oil prices is continuing because of a mismatch in demand and supply. The demand is low as major oil importing economies like Japan and China are facing slowdown. The supply on the other hand, is rising on account of the U.S. shale boom. The leading OPEC member Saudi Arabia, want to negate the increasing supply of shale oil by the USA and build a dominance in the Middle East region by increasing it supplies of oil and thus gain considerable increment in market share in the global oil market. But whatever be the reason of this drop, the Indian economy which is projected to grow at a faster rate in 2015, could not have asked for a better timing of the reduction in crude prices.Impact on Upstream Sector: The sharp decline in crude oil prices as well some of the major reform policies undertaken by the government of India in the oil and sector, such as deregulation of diesel will be a boon for the upstream exploration and production companies in India. ONGC and OIL stand to gain from the abrupt slide of crude oil. ONGC's net realization after considering the under recoveries it provides to oil marketing companies should increase as the subsidy burden is expected to reduce sharply. The upstream companies have been providing for more than 50 per cent of the total under-recovery burden of the oil marketing companies with ONGC bearing the most nearly around 85%. A change of 1$/bbl of crude impacts the under recovery by 1100 crore rupees. Now it can be easily estimated about the impact the $ 30-35/ bbl decline in the price of the crude oil would have on these upstream companies. The under-recoveries had a huge negative impact on ONGC's net realisations over the years. In 2013-14, ONGC's net realisation was around $41 a barrel and given the situation of low crude oil price, it could mean a net realisation of about $55-60 a barrel. Now these upstream companies can easily go for foreign acquisitions of the hydrocarbon reserves and enhance their assets too from these savings improving energy security, which they had been trying for years.Impact on Downstream Sector: India if not a producing giant, is certainly a refining hub where it refines and markets around 220 metric million tonnes of petroleum products. Out of this around 160 mmt are used for domestic consumption while the rest are used for exports. Therefore, the drop in price of oil will be a blessing for the Indian refiners and the oil marketing companies.The price of crude oil has plummeted nearly 30 per cent since June from $109.05 per barrel to $77.58 per barrel for the month of November and is still maintaining the downward momentum. Despite this steep slide in the price of crude oil, retail prices of petrol and diesel are not declining at the same pace as the reduction in price of crude. The transport fuel consumers are paying only 8.32 per cent less for diesel and 11.31 per cent less for petrol than on June 1. This is because the government has imposed a higher excise duty on these fuels, generating a revenue of Rs.15,000 crore this year and the oil marketing companies therefore have started improving their profitability and refilling their coffers which were empty till now. The sharp decline in crude oil price also helped the government to deregulate the price of diesel and thus reduce a huge burden of subsidy on the exchequer. Impact on India’s Macro-economy: The reduction in fall in global crude prices has a favorable impact on India’s macro economy, setting off multiple growth boosters. The most obvious positive impact is the lowering of inflation. Wholesale inflation growth could slow down as well as consumer prices will ease too. Fuel costs savings would lead to an increase in discretionary spending as well as lower input costs will also add to profit margins for businesses. This would help the companies to revive the stalled projects or reinvest in new projects thereby generating new jobs and growth.The generation of extra revenue and savings on subsidy will reduce the fiscal deficit for this year and help the government at the Centre to achieve its Budget target of 4.1 per cent of the GDP. ). India’s petroleum subsidy burden was around 1.37% of the GDP which is expected to reduce further in 2014-15. Since India imports more than 75 per cent of its oil consumption, deflating global crude prices could improve our Current Account Deficit by up to $40 billion from the $30 fall. It is estimated that if crude prices decrease by 1 $/bbl the net import bill decreases by Rs. 8,345 crores ($ 1.38 bn). This in turn will help India to grow its forex reserves too.Impact on other sectors: The government and the oil marketing companies (OMCs) are not the only ones to gain from the declining petroleum prices. There is a huge positive impact expected on the other sectors too such as automobiles, aviation, railways, chemicals and fertilizers, agriculture etc. Indian Railways consumes around 270 crore litres diesel annually and therefore would save around Rs. 5,000 crore on diesel bill in the current financial year. The price of diesel for bulk consumers, including Indian Railways, have come tumbling down by 16 per cent to Rs 50.51 a litre since June. Similar is the case of the aviation sector. Airline carriers spend nearly 40-50% of their operating costs on Aviation Turbine Fuel. The price of ATF was Rs. 62537.93 as of November 1, 2014 which slid around 10.33% from Rs. 69747.98 in Delhi on June 1, 2014 which itself indicates the relief it would have given to the struggling airline carriers. The automobiles sector will also gain as the businesses can boost their sales due to low price of fuels as well as its accessories such as tyres, as their raw material are directly linked to the crude prices. Other derivatives of crude used such as in paints, packaging materials will get good acceleration in sales thus contributing towards growth in the Indian economy.Concerns over Adverse Impact: Although the bigger picture looks good, there are some foreseeable downside to the emerging oil story for India. The drop in crude oil prices has created a lot of uncertainties in global markets and can adversely impact the global stock markets, including India. Low crude prices are threatening growth in several oil-producing and exportingeconomies like Russia, Saudi Arabia, Nigeria, UAE, Qatar, or Kuwait etc. and this can have serious repercussions for India's foreign fund inflows as well as exports. A cutback on demand from these countries does not bode well for the trade deficit. The amount of investment by foreign investors was around Rs 2,18,512 crore ($ 35.8 billion), including Rs 82,266 crore (around $ 13.48 billion) in equity while the rest in debt which was one of the major reason for the Sensex rally this year. It is feared that FII inflows are likely to reduce as sovereign wealth funds put in by oil exporting countries are likely to cut down their funds for such investments because of less earnings. This could be a major blockade in the progress towards growth and hurt the economy severely. There is also a huge non-resident Indian population in the Gulf. Their incomes could be affected if these oil-producing countries are hit. This might reduce remittances from them to India too.All this being said, India would certainly reap the benefits from the collapse in price of the crude oil till now. The concerns over global slowdown in demand may have a negative impact but India can overcome this sluggishness and maintain an upward momentum. The new government at the Centre has restored faith in the Indian economy for the foreign investors and it is expected they would continue investing here. Therefore, the decline in the price of crude oil has certainly propelled India’s growth towards accelerated progress. India have a golden opportunity to make hay while the sun shines bright.Note: All the data mentioned have been sourced from the official government data on the website of Petroleum Planning & Analysis Cell (Ministry of Petroleum and Natural Gas

According to CBS, which got its numbers from a combination of the ATF statistical report for 2014 and the popular “eBay for guns”, GunBroker.com:Pistols - autoloading centerfire pistols are the most commonly-produced type of firearm in the United States, with 3.6 million produced in 2014.Rifles - taking three basic classes of rifle - semi-automatic, bolt-action, and lever-action - rifles made up 3.4 million firearms produced in 2014.Shotguns - According to CBS, between semi-automatic and pump-action repeating shotguns, this class comprised 935k firearms produced in 2014. A third common class, break-action, is undoubtedly included in these numbers as well.Revolvers - Revolvers made up 744,000 firearms produced in 2014.Misc - “Miscellaneous firearms”, including pistol-grip weapons not included in the pistol category, starter pistols, powder-actuated tools, and serialized parts of incomplete weapons which count as “firearms” to the ATF (receivers, frames) made up about 390k manufactured units in 2014.It should be noted that the CBS picture gallery skews fairly anti-gun; the “top 5” shown for rifles are in the semi-auto class only, while repeating-action rifles are by far the more common. The ATF doesn’t separate rifles by category or caliber as they do with handguns/revolvers, but as a full class, bolt-action significantly outnumber semi-auto. The captions also detail which firearm models were used in which notable mass shooting.