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Old 6th August 2011, 15:13   #226
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by souravc View Post
Well the breaking news it that S&P has downgraded US economy from AAA to AA+ - its a watershed event which should lead to . To re-iterate it should be complete de-regulation rather than any pockets being created .
Agreed. The GOI should do what is plainly obvious. Allow the market to do it's work. NO EXCEPTIONS.

WRT yr comment about crude prices. There I am not too sure. Cataclysmic events such as these cause movements akin to runaway trains. However seems like the news is baked in the price. I do know and admit I could be very wrong here.

Last edited by RS_DEL : 6th August 2011 at 15:17.
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Old 6th August 2011, 15:18   #227
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Most of the calculations that people do to arrive at perceived savings of diesel car over a longer period or the low initial cost of a petrol car are pointless IMO. Yes, you can get some idea but eventually over a period of time both will be more or less same unless your usage pattern is drastically different.
When we buy our cars it's entirely our decision and there is no need to call anyone stupid or smart, because at the end of the day, the buyer has made a decision which may not necessarily be based on the perceived savings or resale value after 5 years.
Personally speaking, i don't buy a car thinking of what would be the resale value of my car after 5 years or when am i going to break-even in terms of price difference compared to a petrol variant.

Also these calculations cannot be generalized across. In misquitas' calculation, FE for diesel and petrol cars is at 19 and 16, which is highly optimistic IMO. It may be true for roads in Goa. I would like to meet someone who gets these kind of averages in a bumper-to-bumper traffic like Bangalore. Real world numbers are much lesser IMO, which makes diesel even more attractive.

More importantly, as you consider cars higher up the segment, which results in lower FE because of more weight, powerful engine etc, a diesel car in a higher segment is likely to break-even quicker compared to a diesel car in lower segment. When you do the same calculations considering lower FE, these numbers go flying out of the window.

I just did some hypothetical calculations similar to what misquitas did:
I have used some lower FE numbers and modest 12,000KM for yearly running for the sake of calculations.
Fuel cost: Diesel: Rs 46, Petrol: Rs 70 (approx Bangalore prices)
Yearly running 12000 KM.

At FE 16 for diesel and 13 for petrol:
Diesel: 46/16 = 2.9 Rs/Km
Petrol: 70/13 = 5.3 Rs/Km
Difference in running cost: 2.4Rs/Km
Yearly running cost difference: Rs 28,800

At FE 13 for diesel and 10 for petrol:
Diesel: 46/13 = 3.5 Rs/Km
Petrol: 70/10 = 7.0 Rs/Km
Difference in running cost: 3.5Rs/Km
Yearly running cost difference: Rs 42,000

If you do the same calculations with 20,000 KMs, the yearly numbers will be Rs 48,000 and Rs 70,000. So while it's obvious that as you drive more per year, a diesel is a cheaper fuel to run, it's also true that with lower FE numbers of city driving, a diesel can be cheaper even with limited yearly driving.

So it's not stupid to be driving a petrol car nor senseless to be driving a diesel with lower yearly running. To each his own.

Last edited by SilentEngine : 6th August 2011 at 15:23.
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Old 6th August 2011, 15:42   #228
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Allow the market to do it's work. NO EXCEPTIONS.
Errr... I think you might find that that is the philosophy that created the economic mess that is now America. Not necessarily a good idea at all.
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Old 6th August 2011, 15:47   #229
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Errr... I think you might find that that is the philosophy that created the economic mess that is now America. Not necessarily a good idea at all.
OT but disagree . Market economics is a oft quoted term in US but the mess is because it was abused badly like one big frenzy - one can't blame the philosophy please .
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Old 6th August 2011, 16:02   #230
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Errr... I think you might find that that is the philosophy that created the economic mess that is now America. Not necessarily a good idea at all.
Thank you for responding to the idea. I do not agree with your response though. Since this is not the place to be discussing this, suffice it to say, markets with some amount of regulation, not classic "laissez faire", are infinitely better than the god forsaken mess we are stuck in.
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Old 6th August 2011, 16:50   #231
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Percentage of diesel used by all cars (not luxury cars alone) - 15 %.

Industrial Use :- 10%

Railways :- 6%

Agri related :- 12%

Electricity generation - 8%

Buses :- 12%

Trucks :- 37%

What is the quantum of subsidy - Rs.6.82/litre.

However, other major consumers of diesel are shopping malls/theatres/industries/cellular phone towers which employ diesel generators when electricity fails. These too will have to pay higher price for diesel if the proposal comes through.
What the subsidy provided by GOI is just measly Rs.6.82/litre. GOI recently increased the prices of diesel by Rs. 5, so if they increase by another 6.82 wont make a big difference at all. Right now diesel is at Rs. 45.xx, so after increase it would be Rs. 52.
No big deal, a luxury car owner wouldn't mind paying just Rs. 7 more. Even for me that Rs. 7 wont make a big difference, so GOI go ahead and remove this subsidy forever. So than diesel would be Rs. 52.xx and petrol would be 67.xx, still I can say diesel cars will sell more, no doubt on that front.
Once you are addicted to the torque there is no turning back. Who wants me to smoke their, what they call high revving engine Honda City with my VW Vento TDi Highline.
Mods hope I don't receive infraction for my 2 paisa.
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Old 6th August 2011, 18:22   #232
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by el lobo 6061 View Post
. Even for me that Rs. 7 wont make a big difference, so GOI go ahead and remove this subsidy forever. .
Don't believe this subsidy crap GOI dishes out. Even if GOI sells diesel at Rs.100 per litre, they will still cry that it is subsidised. Since I was a kid, i have been hearing about this subsidy crap. Since, then the price has jumped up several folds but still they cry subsidy. They need to come come clean on this one. I mean publish a white paper or whatever the GOI does and furnish complete break-up from crude stage to retail. Only then we can assume they have nothing to hide. What they are doing right now is what a petty street vendor does--- mark up a 100 rupee product to 200, then give 40 rupee discount, sell it at 60 rupee profit but cry that you sold at 40 rupee loss.
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Old 6th August 2011, 21:24   #233
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by SilentEngine View Post
Most of the calculations that people do to arrive at perceived savings of diesel car over a longer period or the low initial cost of a petrol car are pointless IMO. Yes, you can get some idea but eventually over a period of time both will be more or less same unless your usage pattern is drastically different.

When we buy our cars it's entirely our decision and there is no need to call anyone stupid or smart, because at the end of the day, the buyer has made a decision which may not necessarily be based on the perceived savings or resale value after 5 years.

Also these calculations cannot be generalized across. In misquitas' calculation, FE for diesel and petrol cars is at 19 and 16, which is highly optimistic IMO. It may be true for roads in Goa. I would like to meet someone who gets these kind of averages in a bumper-to-bumper traffic like Bangalore. Real world numbers are much lesser IMO, which makes diesel even more attractive.

More importantly, as you consider cars higher up the segment, which results in lower FE because of more weight, powerful engine etc, a diesel car in a higher segment is likely to break-even quicker compared to a diesel car in lower segment. When you do the same calculations considering lower FE, these numbers go flying out of the window.
SilentEngine, for the record, I did not call anyone "stupid or smart", but all I did was to project my calculations on a Rs 5-6 lakh petrol/diesel car. I had to make a choice of a petrol or diesel car in December 2010 and with a fixed budget of about Rs 5 lakh, I had to take a call on whether to opt for a petrol or diesel car. Hence, the analysis and the calculations. It may be a pointless exercise to you but it made/makes a lot of sense to me.

Besides, my calculations also justified MY decision to buy a Rs 4.3 lakh petrol car, as opposed to a Rs 5.1 lakh diesel car that I had shortlisted. It is highly possible that these calculations and predictions may not work for other buyers and with high budget cars and it is also possible that "these numbers go flying out of the window". But I couldn't be bothered about the calculations regarding these category of cars simply because I don't fit in that high budget category of buyers.

Also, the FE that I had mentioned in my calculations in NOT highly optimistic. Check out my I10 thread and see the REAL-TIME four FE figures (18.5 kmpl, 17.5 kmpl, etc) that I have got so far. See, I am basing my calculations on conditions here in Goa (quality of roads/traffic, price of fuel, etc) for my specific purpose. I am not too bothered about road conditions or FE elsewhere in the country simply because I am based in Goa and 95% of my driving is done over here, with an occasional inter-state trip.

My calculations were mainly to show that a petrol car need not be rejected in favour of a diesel car in the same category (assuming that a petrol car is about Rs 80,000 cheaper than its diesel sibling), even if...

1. There is a price difference of about Rs 20 between the two fuels.
2. There is 3 km difference in the fuel economy between a petrol and diesel car.
3. The annual driving is about 15K kms.

At the end of the day, each buyer should make an informed decision on whether to opt for a diesel or petrol car. Both petrol/diesel cars have their technological/economic benefits and drawbacks, so there is no point in denouncing one in favour of the other. Different calculations would work for different buyers depending on different conditions (economic, personal, technological, geographic etc). My calculations may not work for a different buyer and vice versa.

If I had the money, I would gladly have bought the I10 1.2 AND the Ritz LDI. Then, I would happily have allowed all my calculations to "go flying out of the window."

- Melvyn

Last edited by misquitas : 6th August 2011 at 21:53.
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Old 7th August 2011, 00:27   #234
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@misquitas, that stupid/smart comment wasn't directed at you. There were few posts in this thread that had that tone, not yours .
Also I didn't say your calculations are wrong. All I said is we cannot generalize, so I did a calculation for a little different usage pattern than yours. In essense, we both ate saying the same thing. It is the buyer who has to make the decision whether to buy a petrol car or diesel car.

Last edited by SilentEngine : 7th August 2011 at 00:46.
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Old 7th August 2011, 10:31   #235
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Pranab Mukherjee has refuted rumours of dual pricing of diesel. Thank God! Let's hope he takes the right step in this regard, moving towards a fully taxed market price of diesel, which should be higher than petrol prices - close to Rs. 70 per litre in Bombay per my calculations. A bare minimum first step would be to move to import parity pricing with zero excise duties, viz. about Rs. 58 per litre
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Old 7th August 2011, 12:20   #236
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Hayek View Post
Pranab Mukherjee has refuted rumours of dual pricing of diesel. Thank God! Let's hope he takes the right step in this regard, moving towards a fully taxed market price of diesel, which should be higher than petrol prices - close to Rs. 70 per litre in Bombay per my calculations. A bare minimum first step would be to move to import parity pricing with zero excise duties, viz. about Rs. 58 per litre
Would you be kind enough to share your calculations please?
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Old 7th August 2011, 12:22   #237
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

The price of diesel affects the price of everything, because everything has to be transported. What about agriculture? Everybody will suffer. The poor will suffer the most, and by a disproportionally great amount.
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Old 7th August 2011, 12:30   #238
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Quote:
Originally Posted by RS_DEL

Would you be kind enough to share your calculations please?
I have already posted on this - appears on Page 15 of this thread (as seen on the iPad app). Sorry, but I don't know how to reply selectively to someone or link to my previous post.
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Old 7th August 2011, 12:42   #239
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Quote:
Originally Posted by RS_DEL

Would you be kind enough to share your calculations please?
Had posted on this earlier. Appears on Page 15 of this thread on the iPad app. At around 2pm on 6/8.

Quote:
Originally Posted by Thad E Ginathom
The price of diesel affects the price of everything, because everything has to be transported. What about agriculture? Everybody will suffer. The poor will suffer the most, and by a disproportionally great amount.
I have to disagree here. As my post mentioned above points out, the diesel subsidy amounts to USD 40 bn. The poor would be much better served if that was used to improve infrastructure, primary health care or best if all, to start a high quality school voucher programme. In fact, higher diesel prices would probably get people to be more conscientious while using diesel powered water pumps and solve problems we have on ground water etc. Transport costs are a small part of most product costs - don't materially affect ordinary people.

Mods: can you please post this instead of my previous reply where I replied only to RS_DEL. I took a while to figure out how to use multiple quote. Thanks.
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Old 7th August 2011, 21:35   #240
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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The poor would be much better served if ...
Maybe, but it isn't, and it won't be.

All of those things should be done, anyway. In the meantime, it is no good giving a poor farmer a voucher for education: it is a few decades too late.
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