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Old 23rd May 2008, 07:58   #16
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Originally Posted by ddd08 View Post
People at times can be really ignorant. Crude Oil is $130 a barrel (1 barrel = 42 US gallons = 34.972 Imperial gallons = 158.987 litres) that means its $ 0.8177 per litre which is Rs. 35.12 (42.945 Rs = 1$ Yahoo currency conversion). That would mean that the increase in price we from crude to refined oil is roughly Rs 15.38. In that there has to be
1) Refinement cost
2) Transportation cost
3) Profit Margin
4) Govt Tax
I guess people are just too consumed by paying more. I have never heard people complain when they get a raise in their salaries. So why complain when prises rise. Ignorance is a major factor. And all of us want to buy bigger cars, add turbo, bigger engines, etc. They don't mind paying excess for that but if something like fuel price increase its a problem.

I feel the price rise for fuel is a convincing move to curb people's usage. Nothing else seems to work. Awareness is for noobs. Only when people can't afford it, will they start to respect it more. And I'm sure once prices reach Rs 150/litre, there will be a lot of people who would suddenly prefer walking smaller distances rather than use vehicles. And then many would like smaller engine cars.

I know may get a lot of resentment for what I have written. But I speak my opinion and the world has always had problems with those who think different.
You calculation would be good if the only product of Crude is petrol. Unfortunately, we have other by products(and other end products too) like Diesel, LPG, kerosene and the list goes till tar i guess. More on What are the uses of crude oil?

So, what about those? When I pay "just" 15rs extra for the all 4 items you mentioned, then they should give me the by products free. Are they?

As agbenny said, I too have read (guess it was mentioned by on politician in kerala) that the petrol price is around 20 rs in Pak & bangaladesh. Then why it is so much in India. The answer from ruling party was "It is because we have so much population".

Some more.... Howstuffworks "How Oil Refining Works"
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Old 23rd May 2008, 08:27   #17
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Originally Posted by pgsagar View Post
Government of India has been milking its citizens since indipendence over price of petrol and diesel. Today fuel may be expensive everywhere but even in cheaper days Indians paid the most for fuel anywhere in the world, thanks to ridiculously high taxes on automotive fuels.

I read it somewhere recently that even today cost price of refined petrol in India is Rs 11 a litre. They take it up to Rs.50 after loading it up with all kinds of taxes.
I am in Singapore these days and checked the fuel prices here. Unleaded petrol goes for SGD 2/ltr which comes approx INR 60+/ltr.

OT - The TCO of a car in Singapore is much higher than India BTW. A Swift 1.2 (yes thats the base model sold here), goes for SGD 50k (roughly INR 15 lacs). Add to that the cost of 'acquiring' a driver's license, the heavy toll taxes throughout the city, the road and parking taxes, the maintainence...the list is endless
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Old 23rd May 2008, 08:29   #18
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Originally Posted by chncar View Post
No offense, but that just doesnt make sense. Do you have any links or sources to prove it?
bellwether is US gas prices, which are around 3.5-4$ a gallon, meaning about 40-45 bucks a liter. There there's only a few(20?) cents tax. Till a few months back it was around Rs 25-30 (at 100 USD levels) and USD was 9% cheaper!

And as for taxes, use http://ppac.org.in/OPM/Sales_tax_apr08.htm

that gives you actual cost. We can go into the import parity pricing mechanism, but basically our petrol shouldn't cost a thing below 60 odd bucks.

PS: I've worked in this sector, so am aware of actual monies - ain't just a disgruntled fellow talking out of his rearside
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Old 23rd May 2008, 09:01   #19
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Originally Posted by ddd08 View Post
People at times can be really ignorant. Crude Oil is $130 a barrel (1 barrel = 42 US gallons = 34.972 Imperial gallons = 158.987 litres) that means its $ 0.8177 per litre which is Rs. 35.12 (42.945 Rs = 1$ Yahoo currency conversion). That would mean that the increase in price we from crude to refined oil is roughly Rs 15.38. In that there has to be
1) Refinement cost
2) Transportation cost
3) Profit Margin
4) Govt Tax
I guess people are just too consumed by paying more. I have never heard people complain when they get a raise in their salaries. So why complain when prises rise. Ignorance is a major factor. And all of us want to buy bigger cars, add turbo, bigger engines, etc. They don't mind paying excess for that but if something like fuel price increase its a problem.

I feel the price rise for fuel is a convincing move to curb people's usage. Nothing else seems to work. Awareness is for noobs. Only when people can't afford it, will they start to respect it more. And I'm sure once prices reach Rs 150/litre, there will be a lot of people who would suddenly prefer walking smaller distances rather than use vehicles. And then many would like smaller engine cars.

I know may get a lot of resentment for what I have written. But I speak my opinion and the world has always had problems with those who think different.
The thing is India doesnt pay the same rate as US for a barrel of oil, and nor do we get the same quality. We pay a lot cheaper for a barrel as a developing nation. Than the govt jacks up with over 60% taxes the cost of fuel. Other developing countries get fuel for a lot less than what we pay. And historically we have always paid more than the world, its a known fact!!!
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Old 23rd May 2008, 09:03   #20
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Originally Posted by nishantgandhi View Post
... Add to that the cost of 'acquiring' a driver's license, the heavy toll taxes throughout the city, the road and parking taxes, the maintainence...the list is endless
To lend perspective to what you say, it would be worthwhile to consider the endless wonders of the public transportation systems in that city state, no?
Therein lies the rub!

Last edited by anupmathur : 23rd May 2008 at 09:05.
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Old 23rd May 2008, 09:06   #21
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Originally Posted by ddd08 View Post
People at times can be really ignorant. Crude Oil is $130 a barrel (1 barrel = 42 US gallons = 34.972 Imperial gallons = 158.987 litres) that means its $ 0.8177 per litre which is Rs. 35.12 (42.945 Rs = 1$ Yahoo currency conversion). That would mean that the increase in price we from crude to refined oil is roughly Rs 15.38. In that there has to be
1) Refinement cost
2) Transportation cost
3) Profit Margin
4) Govt Tax
I guess people are just too consumed by paying more. I have never heard people complain when they get a raise in their salaries. So why complain when prises rise. Ignorance is a major factor. And all of us want to buy bigger cars, add turbo, bigger engines, etc. They don't mind paying excess for that but if something like fuel price increase its a problem.

I feel the price rise for fuel is a convincing move to curb people's usage. Nothing else seems to work. Awareness is for noobs. Only when people can't afford it, will they start to respect it more. And I'm sure once prices reach Rs 150/litre, there will be a lot of people who would suddenly prefer walking smaller distances rather than use vehicles. And then many would like smaller engine cars.

I know may get a lot of resentment for what I have written. But I speak my opinion and the world has always had problems with those who think different.
What we dont like is the fact that after paying a lot of income tax, we still have to pay a lot of tax in the form of fuel.
Figure out this: The great indian government gives 10Rs/ltr subsidy, if we remove that the cost of normal fuel will be 60rs. Now out of that 60 rs. we have to pay 35 rs as tax to government wheather we bought from Reliance or shell or IOC/BP/HP.
The point is that reducing the government tax part. Rather than just increasing 5 rs/ltr, they can easily reduce the tax.
The government is usually in for 3 year bonds and for those 3 years, we have to pay a predecided price and not the present rate. We always get the barrel of oil cheaper than those developed nations.
The things end here that government can reduce the tax. If the argurment is about transportation, then
Suppose Reliance is buying crude indepedent of government, then why tax them when they are selling fuel. The transportation,etc should be left to reliance.

And slightly off topic, but we dont get the quality and quantity we deserve after paying the high price of fuel in India.

But our governmnet wont believe in this and they just give improper/incomplete information and then say, we have to increase prices.

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Originally Posted by chncar View Post
No offense, but that just doesnt make sense. Do you have any links or sources to prove it?

The PSU oil companies are running at a heavy loss due to being unable to hike the price, which is the reason the govt is thinking of upping the price anyway. If the real cost of petrol was 25 Rs and the rest taxes and margins, the private petrol bunks would not have to shut down and close business because of the high cost and inability to match the govt prices.

At some point in time the taxes were perhaps high, but right now the situation is that the govt is heavily subsidising the PSU oil companies and they are still making huge losses, and even that is becoming ubearable to both the govt and the oil companes which is why they are forced to consider raising prices even in an election year.
The government has till now provided 10rs./ltr subsidy ( I am residing in Vadodara, my father works in Reliance and I know many who are in IOC )
when the cost of fuel was 50 rs/ltr. The fact is that out of the total cost of petrol, 70% was in the form of government tax. it can be reduced.

The private parties shut down because they were not subsidized by government. This is another partiality from government. The private parties gave us quality and quantity unlike IOC/BP/HP.

Last edited by aaggoswami : 23rd May 2008 at 09:08.
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Old 23rd May 2008, 09:09   #22
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Originally Posted by aseem View Post
The thing is India doesnt pay the same rate as US for a barrel of oil, and nor do we get the same quality. We pay a lot cheaper for a barrel as a developing nation. Than the govt jacks up with over 60% taxes the cost of fuel. Other developing countries get fuel for a lot less than what we pay. And historically we have always paid more than the world, its a known fact!!!
Hmm, AFAIK, most of the treaties(oil price fixing treaties) expired in 2002-2004, and thats the reason everyone is going mad about 135$ oil.
So all are in the same boat, its just that the developing nations cannot afford it.
As for taxes and all, a lot of the cost is oil refining margins.
Thats the reason US refineries, as well as Indian refineries are raking in good profits.
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Old 23rd May 2008, 09:24   #23
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Affordable price for petrol for me: Rs. 65-75

Slightly Off Topic:
As far as price changes for fuel are concerned, we have forgotten that administered price mechanism (APM) was supposed to go off by Apr 2004. That would led to market driven prices & each such rise would be smaller compared to Rs. 2/3 or even 5 that we witness. UPA govt. started APM once again after letting it off for couple of quarters in '04. Let's not talk about short sighted & populist policies of govt. & politicians.
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Old 23rd May 2008, 09:42   #24
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Affordable price for petrol for me: Rs. 65

may be the government should start making good pubilc transport atleast NOW.
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Old 23rd May 2008, 09:45   #25
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Hmm... This petrol hilke, nobody knows where it ends, only alternative is Govt should think of improving Public Transport so as to avoide increase in vehicles sales and inturn petrol consumption.
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Old 23rd May 2008, 09:46   #26
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Affordable price for petrol for me: Rs. 65

may be the government should start making good pubilc transport atleast NOW.
Its 65 for me also! I am right now washing my hercules topgear bicycle for repairing it!
And not just giving the public transport for the sake of giving it. It should be effecient, clean and seucre.
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Old 23rd May 2008, 09:58   #27
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Its 65 for me also! I am right now washing my hercules topgear bicycle for repairing it!
And not just giving the public transport for the sake of giving it. It should be effecient, clean and seucre.
exactly dude. i too am thinking of getting back to my bike.
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OT: I used to have my hercules topgear until 2005. and thats my first bicycle. I just love it.
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Old 23rd May 2008, 10:01   #28
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Originally Posted by anupmathur View Post
To lend perspective to what you say, it would be worthwhile to consider the endless wonders of the public transportation systems in that city state, no?
Therein lies the rub!
yes thats completely true. The high cost of owning a vehicle is well set off against the highly efficient and affordable public transport network. Its a wonder to see it so well integrated.
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Old 23rd May 2008, 10:08   #29
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One thing is for sure. If this time the petrol prices are hiked by Rs 5/ ltr, the sale of banana leaves is definately going to rise... cos thats what I will have to wear after selling my cloths!

I cant take it beyond Rs 50 per ltr.
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Old 23rd May 2008, 10:15   #30
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I dont have any figures to quote, but I know that of the Rs50 that I pay for a litre of petrol, a very substantial amount goes as taxes/duty to the state and central government. I do agree that as world oil prices rise, the price we pay should also increase - no issues with that. But the Govt could rationalise the tax structure on something which is so commonly used, instead of treating it as a luxury item.

To give an example. If you have ever bought liquor at the Govt-owned BEVCO shops in Kerala and have taken a look at the breakup given in the bill, you would see that if say the actual cost of the product is Rs100, the tax component is also right there at close to Rs100. That is like 100% tax.

Ofcourse we can say that liquor is not a necessity and also maybe a social evil, so the taxes are justified. But doing the same for fuel is not right IMO.

Coming to what price per litre is affordable for me, I started using petrol when it was Rs9.50 per litre and I am still using it when it is Rs50. So, I guess I would continue to use it even if they price it at Rs100 or more, though there would be changes in the amount of my car/bike usage. If it gets too hot, I might use my CD100 more and use the Baleno only for weekend fun drives.
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