Rediff reports Cabinet mulling Rs.5/lt hike

[mtnrajdeep]

If I understood the fuel pricing correctly, petrol was the one which was being taxed the most! And now, they are saying that petrol too is subsidised!!!!!!!!!! Dont they ever think of reducing the taxes they try to get on fuel???

[neon_daytona]

Petrol may cost Rs 17 more!

[wanderlustindia]

Crude shock: Petrol may cost Rs 17 more-India Business-Business-The Times of India

If this materialized, petrol will cost close to Rs. 70/ litre. Diesel will be hiked by 2-3 rupees a litre as a wholesale increase will hurt the transport industry which in turn will burgeon the already huge inflation figures, as suggested by the oil and finance ministries.

The idea is to de-regulate petrol prices to cover the losses made by the PSU oil firms like IOCL, BPCL and HPCL. However, experts suggest this move will limit the losses to only Rs. 20000 crore as against the total estimated losses of Rs. 200000 crore expected to be made by the oil firms this fiscal. Thats a 10% relief only. Diesel prices will continue to be regulated by the govt.

[esteem_lover]

I dont think the oil companies have made huge losses yet. Most of it has been loss in the profit margins. Common man in his moped will get seriously affected & imagine what auto wallahs will charge.

[gkrishn]

Originally Posted by esteem_lover

I dont think the oil companies have made huge losses yet. Most of it has been loss in the profit margins.

What?!?!
I read some where the losses(or margin or what ever) are close to 550 crore per day. And couple of months like this, and they will not have money to pay salary. I dont have the link, but this is what i remember reading.

[raul]

Interesting use of the word 'deregulate', this when the prices are at an all time high and threatening to shoot further, they should have done this 'deregulation' when its was $65 a barrel.

Now of course they don't have a choice but to raise petrol prices but its just to sustain subsidy model not deregulate prices. But this is short term thinking because if the prices rise further you will find it impossible to keep on subsdising diesel like this without raising petrol prices much above the international deregulated prices via more taxes.

The taxes on petrol must be adding up to at least 40% if not more with excise, customs duty, sales tax and local taxes and I don't see why the financial ministry is so adamant. This is a temporary fix and it appears petrol users are in for the 'royal treatment'.

[Eddy]

There has been a marginal hike of 3 paise (yes, paise) in Chennai. Can anyone confirm ?

The Hindu : Front Page : Petrol, diesel prices marginally up
CHENNAI: Petrol and diesel prices have marginally increased from Friday midnight consequent to a corresponding hike in the commission for petroleum dealers by the Union Ministry of Petroleum and Natural Gas.
In the city, the increase of three paise on petrol, taking the retail price of a litre of the fuel to Rs.49.64 and four paise on diesel, resulting in the price going up to Rs.34.44, however, has not cheered the dealers.

[asr245]

Originally Posted by wanderlustindia

Crude shock: Petrol may cost Rs 17 more-India Business-Business-The Times of India

If this materialized, petrol will cost close to Rs. 70/ litre. Diesel will be hiked by 2-3 rupees a litre as a wholesale increase will hurt the transport industry which in turn will burgeon the already huge inflation figures, as suggested by the oil and finance ministries.

The idea is to de-regulate petrol prices to cover the losses made by the PSU oil firms like IOCL, BPCL and HPCL. However, experts suggest this move will limit the losses to only Rs. 20000 crore as against the total estimated losses of Rs. 200000 crore expected to be made by the oil firms this fiscal. Thats a 10% relief only. Diesel prices will continue to be regulated by the govt.

What is this going to achieve? After this more and more people will go for diesel vehicles thereby increasing diesel consumption even more and increasing the subsidy budget. What's wrong with putting an extra 10-15% tax on diesel vehicles (cars & MUVs) and using that to partly subsidize diesel? Will also put a check to ever increasing number of private diesel vehicles on roads.

[snaronikar]

All said and done. The Govt may not rise the fuel prices at present and if they want to do it, it will be only marginal as they do not want to risk the election year. Already, they have lost out in Karnataka, next will be Rajasthan, MP and Chattisgarh. If they rise the price, it will have the cascading efect in the polls also. So, until then enjoy guys with the present rate.

[dibbasu]

What this means to the Indian Auto scene. Shall we see more hybrids coming on road? Or pure electric vehicle like Reva taking over Zen or 800. The government will start giving more tax holiday for EVs or hybrid imports? Whats gonna happen in next few months. Appreciate your views.

[jesal]

went to fill up normal fuel today. he said i do not have it u have to take the power one. that is for rs .53. i have been taking fuel from the place for 25 years now so no issues there. normally i tank up but today just filled up 500. then coming back home i decided my car needed a paint job and denting and all. so i gave up the car to my painter as well

[aaggoswami]

Originally Posted by 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.



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.

Misuse: Well if the price increases, then we cant even afford USING PETROL, and he talking about misuse ? And what public transport he is talking about ? Do we have one with proper quality and security ? If we dont have the public transport, how are we going to use one ?

Why is he not talking about the bad quality and less quantity given by the pumps ? This move is definatley going to put pressure in economy.

Originally Posted by asr245

What is this going to achieve? After this more and more people will go for diesel vehicles thereby increasing diesel consumption even more and increasing the subsidy budget. What's wrong with putting an extra 10-15% tax on diesel vehicles (cars & MUVs) and using that to partly subsidize diesel? Will also put a check to ever increasing number of private diesel vehicles on roads.

Excatly, private diesel vehicles and taxi diesel vehicles ( such as Tavera, Qualis, etc and only busses and mainstream trucks are not included ) must be now made to pay completely unsubsidzed and market determined cost of diesel. Its high time. And the private diesel car and muv owners wont be suffering a loss.

Figure out this. A pertol verna gives 10kmpl ( this is just comparative suppossotion ) and diesel will give 12 in city. And on the highway, petrol will give 15-16, diesel can extent it to 18-20kmpl. So even if the cost of petrol and diesel become same, then aslo diesel will be cheaper to run.

In case of samller diesels like Swift the diesel will still be cheaper to run.

The road conditions, if improved, can also help in reducing our fuel consumption along with disciplined traffic.

OT: Looks like our government has one ever green and fool proof technique to earn money. Tax fuel a lot and give the worst possible roads and traffic. So the fuel consumption of each and every automotive vehicle using road will increase and so they will buy more fuel. So the government earns more money.

[lohithrao]

Petrol may cost Rs 17 more!

This will be scary! hope this does not happen....

[rangaraj]

Time to go in for the hybrid Scorpio - diesel + electric! Best of both worlds..

Oops read the details and it looks like it is a petrol + electric..not so great afterall..

[praveen_v]

Originally Posted by lohithrao

Petrol may cost Rs 17 more!

This will be scary! hope this does not happen....

It's hardly a month since I got a petrol fiesta and this comes as a shocker. Hoping that hike will not be so much.

But what I dont understand is the govt policy of subsidising petrol and then taxing it heavily. By doing this govt is earning more at the cost of oil companies running huge losses. Now the govt expects people to pay up more to coverup the Losses of oil companies and it's not ready to cut down the taxes. I really wonder what they are thinking.

Selling petrol at market rates and still taxing it so heavily is really absurd. The loss due to due to selling diesel at subsidised rate can never be overcome by selling petrol at market rates.

And to top it all, the govt says use Public transport. As if they provide world class services and we are not ready to take it up. Can you imagine what mess it would be if everyone uses public transport all of a sudden. Even with so many private vehicles the public transport is inadequate.