Rediff reports Cabinet mulling Rs.5/lt hike

[SuperSyn]

I have no issues with price hike. I do not mind paying Rs 100/L for petrol or diesel.

The problem areas for me are:

1. The convoluted subsidy structure which requires too much juggling of numbers to satisy the Kerosene and Diesel users. Let energy trade at free market rates. This will help curb inherent corruption as well.

2. Politics and policies that penalize private players like Reliance. They have one of the biggest and most versatile refinery, yet can't sell products in India. So we keep all the pollution of having a refinery (petroleum + petrochemical), but export the refined product to other countries.

3. Non existant return on the massive duties and taxes the government collects on both the import of crude, and the sale of refined products. People in UK whine all the time about their high fuel prices, and admittedly they are rather high.

But compared to India they also have true first world road and social infrastructure. We are still stuck at the slum level, because all the revenue is wasted in crack pot socialist schemes, which are flawed in planning and wasteful in execution.

If you are going to collect such high taxes and revenues from me, give me the infrastructure and quality of life as well.

4. No long term vision to minimize the impact of oil addiction. Totally dependent on the Arabs. The nuclear deal is useless, because while we will lose most of our nuclear autonomy, DAE - BARC gang lacks the resources (hard & soft) to build new reactors at a rate that will keep up with demand, even if fuel was available. Building a token reactor every 5 years wont help either.

[normally_crazy]

Fuel prices hiked by 3 - 5 paise

Hike of 3-5 paise per liter ?

[jesal]

Post Deleted by the Team-BHP Support : SMS / Slang is STRICTLY prohibited on this community. Your posts are incredibly hard to read. We would much appreciate your using full & proper english in posts, for the benefit of other forum users.

Please view our board rules carefully before proceeding any further.

[gkrishn]

Originally Posted by normally_crazy

Fuel prices hiked by 3 - 5 paise

Hike of 3-5 paise per liter ?

That turned out to be a bit of damp squib, considering that this topic spawned another 2,3 thread.

[lohithrao]

Originally Posted by gkrishn

That turned out to be a bit of damp squib, considering that this topic spawned another 2,3 thread.

I read in todays TOI, their wont be steep hike and later part reads that 10 & 5rs.... so they were considering to increase it further

Btw Will the crude oil price stop climbing up? any chances of it going down...at this rate we will cross 100 soon:( time to buy a MILEAGE bike.....

[sahakar]

Are there any elections in the next couple of months? If so, then I dont expect any increases, if at all.

[aaggoswami]

Originally Posted by itwasntme

News out on Welcome to rediff.com

(Govt may hike fuel price by Rs 5 a litre)

Govt may hike fuel price by Rs 5 a litre

May 22, 2008 15:15 IST
The Cabinet headed by Prime Minister Manmohan Singh may meet on Friday to consider raising petrol and diesel prices among other measures to bailout state run firms that have been reeling under unprecedented high crude prices.
With Indian Oil [Get Quote], Hindustan Petroleum and Bharat Petroleum projected to lose Rs 200,000 crore (Rs 2,000 billion) in revenues on sale of petrol, diesel, domestic LPG and kerosene below import cost, industry sources said a hike in the range of Rs 2 to 5 per litre appears on the cards.
Petroleum Minister Murli Deora on his part neither denied nor confirmed Cabinet being scheduled for Friday.
"We are discussing all possible measures to help and protect our public sector oil companies. . . some remedial measures need to be taken (urgently)," he told reporters.
The three firms are currently losing Rs 450 crore (Rs 4.50 billion) in revenues on fuel sales every day. Petrol is being sold at a loss of Rs 16.34 a litre, diesel at Rs 23.49 per litre, LPG at Rs 305.90 per cylinder loss and kerosene at a discount of Rs 28.72 per litre.
Deora has called a meeting of heads of the oil PSUs tomorrow morning and after that may brief the Cabinet of the financial strain on the companies in view of international crude prices topping $135 a barrel.
"I cannot rule in or rule out anything at this stage," Deora said when asked if petrol and diesel prices hike was an option under consideration.
"We are concerned at the financial health of the PSUs," he said, but asked the consumers not to panic.
"There is no rationing of fuel as has been reported by one newspaper. We can never resort to such an anti-consumer practice. I have spoken to BPCL [Get Quote] chairman Ashok Sinha who has categorically denied such a move," he said.
Deora said state-run retailers IOC, BPCL and HPCL [Get Quote] were under severe financial strain and may have taken some measures to cut cost but fuel rationing was not being resorted to.
"I would like to plead with the public and consumers that there is no such move," he said. "The government is at work trying to solve the problems being faced by PSUs. There are some measures that are under discussions."
"Our PSUs have done great service to the nation. Besides making available auto and cooking fuel to every nook and cranny, they have also been selling at a price lower than the cost. This has caused some constraint and we are concerned about it," he said.
In Asian morning trade on Friday, New York's main oil futures contract, light sweet crude for July delivery, rose to a high of $135.04 a barrel before easing to $134.87.
The three firms are faced with a huge liquidity crunch and are borrowing Rs 3,500 crore (Rs 35 billion) a month to meet day-to-day expenditure. Borrowings of the three firms have reached Rs 65,000 crore (Rs 650 billion).
The government's bar on oil firms from raising fuel prices despite cost of raw material (crude oil) doubling to over $135 a barrel, is likely to see the three firms end the current year with a revenue loss of Rs 200,000 crore. Last year, the revenue loss was Rs 77,304.50 crore (Rs 773.45 billion).
The government makes up for just over half of the under realisation of oil companies on fuel sales through issuance of oil bonds, while 33 per cent of the losses is compensated by companies like ONGC [Get Quote] and GAIL. The rest is to be borne by the retailers.

Now they are planning to increase the price by 10rs./ltr in case of petrol and 5rs./ltr in diesel.

Petroleum Ministry seeks Rs 10 hike in petrol, Rs5 in diesel - livemint

[aaggoswami]

Originally Posted by SuperSyn

I have no issues with price hike. I do not mind paying Rs 100/L for petrol or diesel.

The problem areas for me are:

1. The convoluted subsidy structure which requires too much juggling of numbers to satisy the Kerosene and Diesel users. Let energy trade at free market rates. This will help curb inherent corruption as well.

2. Politics and policies that penalize private players like Reliance. They have one of the biggest and most versatile refinery, yet can't sell products in India. So we keep all the pollution of having a refinery (petroleum + petrochemical), but export the refined product to other countries.

3. Non existant return on the massive duties and taxes the government collects on both the import of crude, and the sale of refined products. People in UK whine all the time about their high fuel prices, and admittedly they are rather high.

But compared to India they also have true first world road and social infrastructure. We are still stuck at the slum level, because all the revenue is wasted in crack pot socialist schemes, which are flawed in planning and wasteful in execution.

If you are going to collect such high taxes and revenues from me, give me the infrastructure and quality of life as well.

4. No long term vision to minimize the impact of oil addiction. Totally dependent on the Arabs. The nuclear deal is useless, because while we will lose most of our nuclear autonomy, DAE - BARC gang lacks the resources (hard & soft) to build new reactors at a rate that will keep up with demand, even if fuel was available. Building a token reactor every 5 years wont help either.

There are very less Income tax payers in India and those very paying income tax have to pay a lot of tax in fuel also.

I share the same point that if revenue is collected from people, give them quality as well.

[karanraheja]

Good question. Actually paying 100 bucks for a litre is a big time rip off. But we all know that price aint far away. Usually we feel the pinch for a day or two but after that i guess we get used to the hike. But Rs.2-3 per litre is bearable to an extent anything beyond that is unbearable.

[hvkumar]

Good things in life don't come cheap or free.

Isn't everyone of us geting hefty salary hikes and rise in business incomes?

How do you expect oil prices alone to be static in these ttimes of galloping demand increases?

Is India one large welfare state where Govt provides us free everything and we live happily ever after?

India must be one of the very few nations in the world which subsidises fuel in this economically disastrous manner

Take Sri Lanka, for example - they pay the market prices - no one is happy about it, but what other choice do you have?

Take Indonesia, which used to have a pricing system like India till a few years ago. They did away with subsidies a few years ago, there were riots, but now all pay the market-linked rates for petrol and diesel. And neither Indonesia or Sri lanka is touted as the next economic "super-power" which India is trumpeting all over!

One of the major reasons atributed for the rise in crude prices is the depreciaion of US Dollar agains major world currencies.

And countries like Iran have switched pover to billing for crude in Euros because they find the US Dollar depreciation wrecking havoc with crude prices.

Do you also realise that the impact of rising crude prices has been blunted in India because of the dollar's fall against the rupee?

[Insane Devil]

Yesterday i did and my cousin were talking about the Production cease of the V8's and V10's in the US. While comparing the prices for Petrol in the US and INDIA, its like :

US : Rs.46 per litre, (1 US Gallon = 3.79 LTS. Current price : 1Gallon = $3.80 - $4.00)
India: Rs.54 per litre!



Now even while they are continiously whinning about real high prices of petrol, they are still quiet cheaper than us! No wonder they have been enjoying the V8's and 10's!

[hvkumar]

Originally Posted by Insane Devil

Yesterday i did and my cousin were talking about the Production cease of the V8's and V10's in the US. While comparing the prices for Petrol in the US and INDIA, its like :

US : Rs.46 per litre, (1 US Gallon = 3.79 LTS. Current price : 1Gallon = $3.80 - $4.00)
India: Rs.54 per litre!



Now even while they are continiously whinning about real high prices of petrol, they are still quiet cheaper than us! No wonder they have been enjoying the V8's and 10's!

...because US produces more oil than we do
......because bulk of the retail sale price in india comprises of taxes, taxes and taxes.
.....and although gasoline is tthe holy cow for American consumers, no one talks of subsidies there - once in a while, they run over countries like Iraq in their quest for cheaper oil but prices are market-determined.

[aaggoswami]

Originally Posted by Insane Devil

Yesterday i did and my cousin were talking about the Production cease of the V8's and V10's in the US. While comparing the prices for Petrol in the US and INDIA, its like :

US : Rs.46 per litre, (1 US Gallon = 3.79 LTS. Current price : 1Gallon = $3.80 - $4.00)
India: Rs.54 per litre!



Now even while they are continiously whinning about real high prices of petrol, they are still quiet cheaper than us! No wonder they have been enjoying the V8's and 10's!

We have so many taxes to pay that it really "taxes" us too much. We are stretched by these ways. In US laws are made for humans and in INdia, humans are there for laws.

In developed markets, the qualtiy and quantity of fuel is honest. This cant be said for india. Plus the taxes are now taking the fuel price to 60rs/ltr.
Forget V8, most of indians cant even enjoy a 200cc motorcycle.

[rangaraj]

Petrol likely to cost you Rs 10-16 more- Oil & Gas-Energy-News By Industry-News-The Economic Times

Petrol likely to cost you Rs 10-16 more
26 May, 2008, 0503 hrs IST,Rajeev Jayaswal, TNN
Petrol price hike
NEW DELHI: Petrol, a fuel used primarily by urban consumers, could soon be selling at market prices. This would mean an increase of Rs 10-16 per litre at current prices.

Officials told ET that a proposal to sell petrol at market prices, while keeping diesel, cooking gas and kerosene at subsidised rates was under consideration. According to a Union minister, some Cabinet members are in favour of market-determined petrol prices. The Cabinet is likely to take up the proposal at a meeting soon, which will discuss a bailout package for state-owned oil marketers.

“With crude oil prices breaching $132/barrel, nothing can be ruled out in the domestic market. Some members in the Cabinet favour prices of petrol to be market-determined, while regulating prices of diesel, cooking gas and PDS kerosene to safeguard the poor and avoid stoking inflation,” he said.

“I strongly believe that subsidising petrol not only encourages its misuse but also discourages use of public transport. Having a market-determined price would help in the survival of oil cos without any significant inflationary impact. The poor, anyway, don’t use personal vehicles,” added another Cabinet minister. He added that there were other members with similar views.

The idea has also been mooted by the working group on petroleum & natural gas sector for the formulation of the XI Plan. In its report, the group chaired by petroleum secretary MS Srinivasan had said: “In the case of both petrol and diesel, regular and small adjustments in price are recommended, failing which we may be forced to correct prices in one go, bringing about a price shock. Furthermore, if we are to reduce consumption of oil products, price signals must be transmitted to consumers so that they can make adjustments on their side as well.”

While there is a case for petrol, a similar move is not recommended for diesel due to its impact on inflation, the member said. According to an internal oil ministry exercise, petrol has insignificant weightage in the wholesale price index (WPI). The WPI consists of three major groups — primary articles (with 22.02% weightage), manufactured products (63.75% weightage) and fuel, power, light and lubricants (14.23% weightage).

The third group is subdivided into three categories with following weightage assigned — coal mining (1.75%), electricity (5.49%) and mineral oil (6.99%). Among the mineral oil category, diesel has the highest weightage of 2.02%, followed by LPG (1.88%). Petrol has only 0.88% weightage, an official source said.

A senior official in the oil ministry has said the Cabinet would meet soon to help public sector oil companies — IOC, BPCL and HPCL — offset losses. “The Cabinet agenda is yet to be finalised and it will contain all options including a price increase and a duty rejig. The oil ministry has so far, not specified any quantum of fuel price hike. It is a political decision and it is up to the Cabinet to decide,” he said.

[mjothi]

Originally Posted by rangaraj

“I strongly believe that subsidising petrol not only encourages its misuse but also discourages use of public transport. Having a market-determined price would help in the survival of oil cos without any significant inflationary impact. The poor, anyway, don’t use personal vehicles,” added another Cabinet minister. He added that there were other members with similar views.

What misuse is he talking about?

Time to shut off the Petrol car production!!! Are you hearing Nano

He forgot that the poors are mostly using Petrol rather than Diesel. Which 2 wheeler comes in Diesel engine?

So, this will just lead to reduce of sale in petrol cars and increase in Diesel ones, and eventually the very reason of hiking the petrol price will not be met

When are these guys going to make a plan that will really work...

More and more appartment comes with Diesel gen sets, and what about those? I am not sure if they are already buying at premium for these gen sets.