How fuel price mirage has eroded India's credibility among investors

Lack of oil pricing reform is yielding supernormal profits for state-owned companies but hindering global majors from investing

It is axiomatic from the pattern of their operations worldwide that global oil majors are willing to invest wherever oil flows, irrespective of whether the country is a democracy or a dictatorship. What these companies look for is policy and tax stability. That’s because returns are earned over decades; it can take years of exploration to strike oil and costs hundreds of millions of dollars to drill a well. Predictably, they are wary of investing in a country in which the government announces reforms and concessions and then reverses them, potentially causing crippling financial losses.

India’s fuel retail business is