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Old 4th September 2008, 13:10   #46
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Oh, already there are enough tax in all the heads govt can collect.

Dual pricing will definitely help govt to gain / share some burden. Ofcourse people do find alternatives to cheat the system. But it should not stop from implementing something that will do some good.
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Old 4th September 2008, 13:24   #47
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Max, I would guess that you do not drive a diesel. we are already paying a premium on diesel cars, and on vehicles with bigger displacement.

Why do you want a bigger tax on diesels only ? To be fair, everybody should share the burden. The tax should be spread across all cars - If The Current Tax levels are not enough already.
Didn't know this needed an answer but - the rush for diesel has increased mainly 'cause of the difference in fuel pricing. Some may buy diesel for the FTD factor but for most it's the savings and the savings come from the fact that diesel is far more heavily subsidised than petrol . So why should private cars get the benefit? Do you really think that diesel Swift would have such a long waiting period if diesel was as expensive as petrol (or have a subsidy of similar level)
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Old 4th September 2008, 13:39   #48
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Lets face it, whatever the price becomes, we will still be using our vehicles.
Maybe we'll plan a bit better but we will still continue driving them daily!

This also means IMO that Petrol should soon hit 100 Rs per litre / on par with the rest of the world, give or take. And let Diesel also go up to an extent - but IMO Diesel will always remain at a lesser price than Petrol.

If they implement this differential pricing of Diesel for private/ transport vehicles, I have one question - why should the so-called fortunate few who are already extremely heavily taxed via income tax and everything, be forced to pay for this subsidy too? And in terms of sheer numbers, given the level of personal/ private consumption of diesel, will it be anywhere near sufficient to bear the subsidy on commercial/ transport users? I fill my Diesel vehicle twice a month, consuming about 80 litres per month.

With inflation hitting 13%, I m not sure how much of this rising cost the average salaried person can bear on top of the taxes and other things he/she already bears!

And if India wants to continue the exponential growth it has witnessed these last 5 - 7 years, then it is time one looked at the impact on growth rates too, which will automatically define the next year's increment/ earning potential as well !

The majority of the users are Petrol users and the largest worst hit majority in all this will be the poor working middle class executive single wage earner riding around on his bike, with a wife and family to look after, feed, clother, shelter and educate.

The Commercial Diesel user (trucks and so on) will suffer to an extent, because price of Diesel will not be kept so low as to be unviable - there will be some kind of increase even in commercial diesel and thus there will be consequent rise in essential commodities freight etc. Buses etc will also suffer so the common man's transport will become more expensive.

Since everything is inter-connected in such a huge vicious cycle, let our illustrious policy makers consider these points too.

Last edited by shankar.balan : 4th September 2008 at 13:42.
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Old 4th September 2008, 14:28   #49
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Originally Posted by shankar.balan View Post

The Commercial Diesel user (trucks and so on) will suffer to an extent, because price of Diesel will not be kept so low as to be unviable - there will be some kind of increase even in commercial diesel and thus there will be consequent rise in essential commodities freight etc. Buses etc will also suffer so the common man's transport will become more expensive.

Since everything is inter-connected in such a huge vicious cycle, let our illustrious policy makers consider these points too.
Thats exactly they are trying to follow Dual pricing. Even-though the revenue from private players are not going to make an big impact, its like something is better than Nothing.

Either case, Oil companies will get what they are getting. Either through subsidy (may be in terms of bonds to be cashed in later stage) or from consumer directly.
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Old 4th September 2008, 15:05   #50
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Originally Posted by shankar.balan View Post
This also means IMO that Petrol should soon hit 100 Rs per litre / on par with the rest of the world, give or take.
And just how many countries have Rs 100/L petrol?! Many have Petrol cheaper than in India, octane-to-octane. Large part of the price component is import duties and such.
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Old 4th September 2008, 15:13   #51
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rob the rich and feed the poor. This is turning into a banana republic with robbing hood flavor.

Already the "affulent middle class" whos crime is earning money pays for so many subsidies, not they will pay for this subsidy too!
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Old 4th September 2008, 15:18   #52
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The largest growth has come from Diesel electrical generators, used in all kind of industries from light manufacturing to services.

The government wants to control diesel consumption, but cannot provide reliable and sufficient amount of electricity.
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Old 4th September 2008, 15:38   #53
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Ludhiana was recently reeling with diesel shortage.
Reason : 10 hours power cuts a day meant diesel gensets on overdrive. Apart from pollution problem this also caused diesel shortage.
If the govts get their act together, such problems won't come.
As for diesel subsidy. I am all for removing subsidy from diesel, but do it for everybody. This culture of equal and more equal citizens has to stop
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Old 4th September 2008, 15:50   #54
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^ Do we know why diesel subsidy exists?
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Old 4th September 2008, 16:17   #55
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Yes, to control inflation, so that transport of goods is cheaper.
But such inflation control is dangerous. If oil had crossed $200/barrel, the economy would have gone for a toss, and it would have been a disaster.
Now the finance ministory is coming up with proposals which will only make the black marketeers richer, as 90% of diesel will still be sold at the subsidized price.
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Old 4th September 2008, 16:26   #56
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Quote:
Originally Posted by tsk1979 View Post
Ludhiana was recently reeling with diesel shortage.
Reason : 10 hours power cuts a day meant diesel gensets on overdrive. Apart from pollution problem this also caused diesel shortage.
Why go that far, same situation in the NCR as well - I've just changed my Gurgaon pump because I was fed up of seeing jerrycan after jerrycan being filled to the brim while cars were waiting in queue & then the vehicle owners being told that diesel was in short supply so "sirf hazaar rupiya ka milega sirjee".

Have switched to a "Pure for sure" closer to the house, hopefully the quality should be OK
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Old 4th September 2008, 16:44   #57
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Quote:
Originally Posted by tsk1979 View Post
Yes, to control inflation, so that transport of goods is cheaper.
But such inflation control is dangerous. If oil had crossed $200/barrel, the economy would have gone for a toss, and it would have been a disaster.
Now the finance ministry is coming up with proposals which will only make the black marketeers richer, as 90% of diesel will still be sold at the subsidized price.
So, for non-commercial personal use, there is no reason to continue with the subsidy.

Of course total wiping off of subsidy and letting it go the market price way is the best, however, since ppl are more concerned about how much they are spending right now (than analyze, this lower cost today is going to hurt tomorrow), and that ppl make voting decisions based on short sightedness more than long sight or foresight, The govt cannot do away with subsidy on diesel whihc is used for transportation.

I can understand that many of the diesel vehicle owners will condemn such a move, and would come up with reasons why it wont work etc. And that most of the gasoline vehicle owners would be supportive since they are (unecessarily) paying for the whole India's subsidies (on Kerosene, LPG and Diesel).

Well ... Diesel subsidy has been there ever since India decided that its economy would be built on diesel. All our locomotives, public transports, goods transport, agriculture equipment ran on diesel (like it does so now).

Gasoline was only consumed considerably by really rich ppl who could afford cars, and some less better off who could afford a two wheeler. (But both of these were still better off than less rich who have to use public transport. The less rich who get more hurt by 1 rupee increase in price of cereals, pulses because of higher cost of transport of goods than these gasoline vehicle drivers)

There were no considerable diesel vehicles for private use (that the rich could use for their own pleasures).
It was like diesel was for masses, and gasoline was for the creme-de-la-creme of India.

Is that situation same right now?
If we see the number of cars on the road right now - the gasoline - diesel split is much closer to 50-50 than it was ever before.

Why, as a gasoline vehicle owner, should I pay for someone who is more affluent than me, and owns a diesel vehicle (say Indigo)? (Consider a scenario where I am a M800 owner).
The scenario am talking about is nothing fictitious.

(The scene is even better when you consider diesel vehicles like Skoda, Sumo, Safari, Scorpio etc ...)



Agreed - that removing subsidy completely is the best. But that can't be done because of politics.
So why not try the second best option?

Last edited by alpha1 : 4th September 2008 at 16:50.
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Old 4th September 2008, 17:07   #58
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If this happens i want all car manufacturer's to price their petrol and diesel variants on par. Till now they used to cash in on this thing to price the diesel variants at a premium.
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Old 4th September 2008, 17:13   #59
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Agreed - that removing subsidy completely is the best. But that can't be done because of politics.
So why not try the second best option?
I assume that you meant partial subsidy (for transporters & farmers) as the second best option.

Without making a long story out of it, I am sure all of us will agree that this will only lead to corruption and pilferage. Are we ready - infrastructure-wise - to detect and curb corruption by at least 50%? If not, even if 50% of the masses buy Diesel in black (considering the cab drivers, private bus drivers, etc), the benefit to the Oil Companies and Govt is offset - We all know that the major chunk of diesel is not used for private cars!

Most of the posts in this thread is against dual-pricing - and not against removing subsidy. And I also agree that that should be the way to go. Subsidies have only made farmers out of Bachans, while the farmers who give us our grains commit suicide!

I am a Dieselhead - and I don't mind paying Rs.55.07 (cost of petrol here) for Diesel. Or even higher if both the fuel are priced at actuals - but why throng them with multiple layer of taxes? I am already paying Income Tax for what I earn, and am being taxed multiple times for each every sneeze - thanks to Chidambaram!
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Old 4th September 2008, 17:53   #60
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Anyway, I do not believe in direct taxation like Income tax.

... and indirect like excise and sales tax needs to be justified and be made accountable (as to where and how and WHY is that money being spent).
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