Dear members,

Prime minister said there will be no cut in petroleum price very soon. Reason is Rupee appreciation. According to governments due to high rupee and high import around 80% is forcing no cut in price. In 2002 crude was at $50, petrol price was at 28 rupees ad Diesel at 18 rupees. Rupee was at 40, but now situation is different rupee is above 50 mark.

Taking percentage of appreciation in rupee and percentage of decline in crude is clears doubts. Percentage of crude declined from all time high is 66% ie at $50, rupee appreciation is 30%. This means oil companies have to pay $60 when international crude price is at $60. That means oil companies are now in huge profit,huge revenue from petroleum is also high. Certainly oil companies are still in loss even though taking present global situation crude will not reach $100 long period, so even if cut in price comes oil companies will come to profit very soon. One more point we like to add is there is huge tax is in petroleum products, reducing it petroleum price can be reduced. Reason for no cut in price, no tax cut is _________________.

Left is asking why airlines price is cutting heavily, 3 or 4 times cut in came in last couple of months, interesting factor is now airlines petrol price is lesser than the petrol we are using. In this case we are with government because huge loss is impacting Airlines. The Airlines charge is very high when it comes to ground, huge profit only when it in air. Airlines companies have to pay very huge tax for staying in ground, that's why all airline companies are in loss. Due to loss there is no cut in air line price. So to avoid bankruptcy there is no other way.

We can blame government for rupee appreciation, if we go back to few years back, it was not so easy to take money back to dollar, specially for FIIS. We had pointed this news 2 years back. Why rupee is going up is due to high out flow of money. If strictness was introduced present time rupee will no go up so fast.

Happy Trading,

LakshmiStockGroup.com