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Old 11th November 2011, 12:43   #136
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

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Originally Posted by RegularIndian View Post
2. other expenditure has increased 70%
3. 'Consumption of Raw Materials' as an expenditure item has increased by almost 50% from 30k Cr to 46k Cr. It is safe to assume that this line item means 'cost of operating the refineries, capital expenditure in increasing capacity etc.'

Argument 1: How can there be such a steep rise in cost of operating a refinery in 1 year?
Argument 2: If there is an additional capital expenditure to expand capacity etc. then the 'loss' is not due to 'inability to charge a certain price form the consumer'

The 'Loss' seems to be 'cooked' up to garner support from the media etc.

There is another point to be noted here.
IOCL and similarly other OMCs buy from varied sources including OIL, ONGC, GAIL etc which are also Govt owned, and they are also charging a 'profit' on selling the crude to OMCs, hence the Govt is charging profits twice, if not more, on the same product...

IOCL Q2 results pdf attached here..
All of India switched to BS3 and BS4 Fuel in September 2010. Maybe the refining costs increased. There was a lot of Refinery upgrades done to make this a possibility. But this is most probably a one-time expense.

Last edited by antz.bin : 11th November 2011 at 12:45.
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Old 11th November 2011, 14:03   #137
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

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Alpha1: Please look at the expenditure table of the attachement

Item 6b is 'Purchase of Items and Crude for resale': 40k Cr
Item 6c is 'Consumption of Raw Material': 46k Cr

It is the '6c' that I am talking about. If this is the price of crude, then what is 6b?
Purchase of Item and crude for RESALE - means exactly that.

IOC has refineries mainly in North.
When there is a requirement in South, they buy crude or products like petrol/diesel/LPG/ATF/kerosene etc from other oil companies - like HPCL - Vizag, CPCL - Manali, BPCL - Kochi etc and sell them to the consumer.

Why they do this? Because IOC has fuel pumps at Kochi!

Because there is a huge airport at Bombay that requires ATF.
But there are only two refineries - BPCL and HPCL at Bombay, and none of IOC.

It makes economic sense for the country to route this way.


Why are we missing the big: Subsidy from State/Central govt and Grant from Govt of India!! (almost 7500 crores, which is missing this year)


To tell you the truth - these un-audited quarterly results are usually hogwash for the stock markets.
What counts is the audited annual report results. (Even those are cooked up though)
Can you tell what are the other expenditures in 6(e)?
In annual report there will be schedules attached that give a breakup of this "other" and vague earnings/costs.

Last edited by alpha1 : 11th November 2011 at 14:10.
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Old 11th November 2011, 15:22   #138
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

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Originally Posted by Irish View Post
Below table shows the break-up of taxes, excise duties, cess and other levies on petrol prices in Delhi, India. It also shows how diesel is so affordable (relatively) at at price of Rs. 41.29 in Delhi while the petrol more like an elitist fuel in India.

Attachment 839759

Cheers!
Irish
Thanks for the table Irish.
Item F. Cess for eduation & highways. Are we paying for highways as well. I thought for most of the new highways, toll help finance the build + maintenance + profit part and the other normal highways can be dealth with Road taxes. Anyways we have every increasing vehicle purchase yoy.
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Old 11th November 2011, 17:07   #139
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Question Re: Fuel Pricing in India. Detailed Robbery Analysis.

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:-O is all I can think of!

Purely my thoughts: Till the time we do not have young heads in politics who have an urge to correct what is wrong, I think the country will go to dogs soon ...

Was Raja (Telecom minister, enjoying free food, accommodation and 24X7 Security in Tihar Jail) too old?

Age gender or any such thing don't matter, what matter is the direction and reason for a persons existence. At high levels of governance, you have risen beyond being a mere mortal, your decisions will effect fate of a billion people. if only the leaders realise this then their work will become a mission. They will live a full life and will be remembered far beyond their tenure.
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Old 11th November 2011, 22:17   #140
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

I have been going through this thread and my observations.
1. The definition of "Common Man" is very very vague. If a person owning a TVS 50 (the most basic and low priced two wheeler) is not considered as common man, then India sure is a Third World country despite all the noise about economic reforms, etc.
2. One gentleman mentioned burning of Govt. official by Oil Mafia. Sincerely requesting to go through the complete facts and read that the person burnt was already involved neck deep in corruption and three investigations were already in process against him. CBI frowns on Yashwant Sonawane victim tag - Mumbai - DNA Half truth is always dangerous. (I don't supporting his burning in any way.)
3. Luxury Cars are present in very very small numbers and not all of these are running on Diesel, so "bike subsidizing for Merc" is nothing but a populist comment.
4. Diesel car owner already pays anything between Rs.50000 to few lac as premium at the time of purchase for the same variant. On top of it he get's fewer accessories and features (as numerous threads are already present on this topic). Then there is higher maintenance and poor resale value. In a way he is also not extraordinarily better off financially by buying Diesel. This point should satisfy "Misery loves company" and "Differential taxation for Diesel Cars" supporters.
5. One gentleman suggesting that any political party can take advantage by not increasing petrol prices and then after winning election can do so. Congress did EXACTLY that during the last General Elections, first they postponed fuel price hike and then increased petrol (and Diesel) prices by a whopping 5 (and 3) Rupees, right after the elections.
6. Now the most important point in my opinion, we can safely assume that "decent middle class person" who is a) Owning a car and/or Two wheeler b) Living in city c) Doesn't have time to do anything other than his office work can't bring any political change because a) Their strength in numbers is too small for political parties to get worried about. (I remember when after the general elections, whoever I spoke to voted for BJP but the Congress won comfortably) b) They don't have time even to update their name in Voter's list which is far more important than forwarding emails.
7. I recollect a recent thread mentioning "Is it easy to maintain a Petrol car after the recent price hike", there I read one comment mentioning that we are paying foreign currency for oil as we have to import it, Govt. MUST try to control the usage of fuel to keep it in some kind of check.

So one can easily surmise that the "petrol" pricing topic is very very sensitive in all respects.

P.S.- On a lighter note. the best strategy to follow is to buy shares of Oil companies and earn profits to at least get back something what we are paying them everyday.
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Old 12th November 2011, 01:46   #141
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

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I have been going through this thread and my observations.
1. The definition of "Common Man" is very very vague. If a person owning a TVS 50 (the most basic and low priced two wheeler) is not considered as common man, then India sure is a Third World country despite all the noise about economic reforms, etc.
Unfortunatly true athe majority of Indians do not even own a TVS50. We are an elite group. As you know, a significant proportion earn <20 Rs. a day.
3. Luxury Cars are present in very very small numbers and not all of these are running on Diesel, so "bike subsidizing for Merc" is nothing but a populist comment.
Most Luxury cars are diesel, but not for cheaper running costs but for better resale value. Also in many Luxury cars, diesel varient is less specced and cheaper than petrol sibling.
4. Diesel car owner already pays anything between Rs.50000 to few lac as premium at the time of purchase for the same variant. On top of it he get's fewer accessories and features (as numerous threads are already present on this topic). Then there is higher maintenance and poor resale value. In a way he is also not extraordinarily better off financially by buying Diesel. This point should satisfy "Misery loves company" and "Differential taxation for Diesel Cars" supporters.
My advice to these supporters is to drive any diesel car for 30 mins in Bumper to bumper traffic. They will then insist on further subsidies for diesel car owners (sufferers)
6. Now the most important point in my opinion, we can safely assume that "decent middle class person" who is a) Owning a car and/or Two wheeler b) Living in city c) Doesn't have time to do anything other than his office work can't bring any political change.
Who cares for the minority. Govt. only loves the common man.
7. I recollect a recent thread mentioning "Is it easy to maintain a Petrol car after the recent price hike", there I read one comment mentioning that we are paying foreign currency for oil as we have to import it, Govt. MUST try to control the usage of fuel to keep it in some kind of check.
Govt. is keeping a check by increasing prices. But also shooting itself in the foot by subsidies.
So one can easily surmise that the "petrol" pricing topic is very very sensitive in all respects.

P.S.- On a lighter note. the best strategy to follow is to buy shares of Oil companies and earn profits to at least get back something what we are paying them everyday.
Oil shares pay dividend only to the govt in the name of tax.


Interestingly there is a highway cess on petrol and not diesel. Is it because trucks and buses are yellow board?

Last edited by wildsdi5530 : 12th November 2011 at 01:54. Reason: additional point.
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Old 12th November 2011, 20:28   #142
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

Regularindian,

Good that you are reading and taking the effort unlike many others on this thread who are simply venting their own frustrations. However, you're a bit wrong.


Item 6b is 'Purchase of Items and Crude for resale': 40k Cr
Item 6c is 'Consumption of Raw Material': 46k Cr

My read (and I could be wrong), is that:
6b can mean crude being purchased and transported over its pipelines to inland refineries (it does operate pipelines as well btw). or could be stuff it bought from other refineries to market. for eg in north, panipat is IOC refinery - if HPCL is selling fuel, it is buying from IOCL there, than truck it all the way across. of course, here it could mean buying from HPCL refinery in mumbai for instance. Or it could be purchase of an entire ship's worth of cargo (refined motor fuels) for resale in india.

Consumption of raw material could be when crude is taken up to be processed in its refineries.

In my mind, the numbers from the report seem logical.

@alpha1 bhai - agree with ur points mostly!
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Old 12th November 2011, 23:18   #143
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

A good detailed thread. My opinion is that these oil companies will never go on heavy loses. If so they would've boycotted against everyone - Politicians, governments, etc., just because they're not able to run their company..

All these price rise stunts are to ensure that they alter the profit margin when the crude oil price go north ( price cut never happens when the crude oil cost is down).

I think most of us talked enough about it, but seeing what these politicians are doing on a daily basis - Plundering people's money. We (people) should put pressure on the government to reduce the cost (by boycott, rally, votes in social sites, newspaper survey etc.,) We fight for our rights
If they're not able to manage the economy of the country, let them get hold of all corrupt people, take the money from them & manage the situation instead of putting burden on us.

I agree that paying tax is every citizens responsibility & people will not look at various ways to evade it when they think it will be used wisely for the welfare of the nation & its people. In the current environment , I dont think anyone can stand up & say things are in place.

The fire should never go down. Atleast it will keep the heat & make the politicians fear that people will not listen to everything that they say or pass to us.

I'm one of those hoping that India would get out of this ugly mess soon..
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Old 13th November 2011, 10:27   #144
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

@mail2vm; Petrol prices are slated for a dip soon. according to yesterday's Hindu.
Also "If they're not able to manage the economy of the country, let them get hold of all corrupt people, take the money from them & manage the situation instead of putting burden on us" You can tax legally earned money but the illegal money cannot be taxed. You can lock it up, freeze the funds, jail the culprit but transferring it to the treasury is a very difficult proposition which may take years.
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Old 13th November 2011, 11:19   #145
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

i think this thread should be closed. People talk about everything under the sun including corruption and what not under the name of petrol prices.


Quote:
Originally Posted by carwatcher View Post

4. Diesel car owner already pays anything between Rs.50000 to few lac as premium at the time of purchase for the same variant. On top of it he get's fewer accessories and features (as numerous threads are already present on this topic). Then there is higher maintenance and poor resale value. In a way he is also not extraordinarily better off financially by buying Diesel. This point should satisfy "Misery loves company" and "Differential taxation for Diesel Cars" supporters.
The premium they pay is out of choice for the technology called diesel engine. And higher maintenance and lower resale value are again the buyers own choice. But just because they decided to buy a costlier vehicle does not mean they should get subsidised fuel. I dont know how this should satisfy the point that the people who do not deserve a subsidy are getting subsidy??

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Oil shares pay dividend only to the govt in the name of tax.
Sorry sir - tax and dividend are different. Taxes are mandatory and dividends are discretionary, whether they are PSUs or Private companies.

Yes we need more rationalisation and more transparency in fuel prices - but blaming the oil PSUs for ricing fuel prices just shows ignorance on the part of the public. If they are making undue profit, why aren't other private companies coming into the fray or why is reliance not being active? there are no insurmountable obstacles. Somebody earlier said this is an unrestricted monopoly market. Nothing is further from the truth.
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Old 13th November 2011, 15:09   #146
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

@mallumowgli; that was just my joke.
Sorry!
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Old 13th November 2011, 15:42   #147
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The premium they pay is out of choice for the technology called diesel engine. And higher maintenance and lower resale value are again the buyers own choice. But just because they decided to buy a costlier vehicle does not mean they should get subsidised fuel. I dont know how this should satisfy the point that the people who do not deserve a subsidy are getting subsidy??
@mallumowgli Most people go for a diesel vehicle only if they have higher running because of the better FE and lower fuel costs. The lower diesel costs have been in existence for a very long time because of the govt policies and you cannot just change the rules of the game suddenly. The petrol cribber could have gone for diesel because the rules/tax are the same for everybody rather than crib about changing the rules of the game. Diesel engine is atleast 30% more efficient than petrol.

Also for your information differential pricing for private cars and trucks in india are just not workable because of logistics issues.. Neither can you have insurance companies collecting tax. There are a very large number of 4 wheelers/3 wheelers in our country which don't even have insurance lol.

Everywhere in the world people who don't deserve subsidy get subsidy. That atleast is not unique to india .

Last edited by vishnurp99 : 13th November 2011 at 15:43.
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Old 13th November 2011, 21:11   #148
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Default Re: Fuel Pricing in India. Detailed Robbery Analysis.

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@mail2vm; Petrol prices are slated for a dip soon. according to yesterday's Hindu.
Also "If they're not able to manage the economy of the country, let them get hold of all corrupt people, take the money from them & manage the situation instead of putting burden on us" You can tax legally earned money but the illegal money cannot be taxed. You can lock it up, freeze the funds, jail the culprit but transferring it to the treasury is a very difficult proposition which may take years.
yes, i did read it. I hope that it would happen

One general point - 99.9% of the people who get caught for possessing black money never get it back . Hence the expectation is that we bring some reform to change the current practices in place so that the money can be used wisely.

These can act as positive drivers to ensure that the common man do not get beaten completely during economical instability.
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Old 14th November 2011, 01:06   #149
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Why does india need 3 PSU OMCs? Why not just one? When we can live with one bsnl, one air india etc... I guess the idea was to keep it competetive in the beginning and we lost the plot somwehere... now they are just like a cartel.
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Old 14th November 2011, 10:05   #150
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@mail2vm; 99% will not get the money back, but it just goes to someone else's pockets. Like customs for example, does any of the confiscated property actually go to the treasury? Of course gold or currency is deposited in the treasury, but not transferred to.
@ak916; It's like we have a zillion news channels, but the same news. The idea is to give a choice when in reality, none exists.
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