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Old 24th April 2012, 18:55   #421
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by scuderiamania View Post
TIf there is going to be any elections in the next 12 months then there is almost no chance of this proposal to come through.
Or if this proposal comes through, there will certain elections in the next 12 months .

This talk is made from time to time to calm the bond markets such that the interest rates for borrowing don't spiral out of control because of the burgeoning deficit.
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Old 24th April 2012, 19:55   #422
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by gkrishn View Post
can you provide the link? I need to know. my zdi booking, might become a zxi, if there is even half truth in this.
It is a Malayalam Source: ????? ?????? ???????????????????????- india kaushik basu reforms six months - Oneindia Malayalam

But you can see the English summary:

"Chief economic advisor Kaushik Basu feels India will see some important reforms in the next six months, including on subsidies and may be partial diesel decontrol and FDI in retail."
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Old 24th April 2012, 19:59   #423
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I guess this is just deregulation that is being proposed. Means, oil companies can change the prices when requires without waiting for govt approval. Taxes remain the same. And I guess, the subsidies too.
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Old 24th April 2012, 20:06   #424
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by gkrishn View Post
..

they were not even able to increase the railway ticket by 2 paisa.
This "in principle" decision to deregulate diesel prices was taken almost 1 yrs ago (last June). This government has not been able to do anything on it in the last year, how do we expect them to implement it now? With people like Mamata on board, it is next to impossible for them to even think about increasing diesel prices. It will take a new government - either UPA with reduced dependence on allies or NDA to take such decisions. OR it will take a situation like Greece or Spain, when our government goes bankrupt by bailing out Air India, subsidizing diesel, employment guarantee, scams etc. Till then, enjoy the ride!

Couldn't agree more with the above statement. +1.
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Old 24th April 2012, 20:19   #425
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

This thread is an oxymoron. Diesel prices are already rational.

If anything there should have been a thread on rationalizing Petrol prices (ie. bringing them down to Diesel levels). Worldwide there isint much difference between the price of these two fuels so if anything petrol prices should come down. This would make everyone happy
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Old 24th April 2012, 21:25   #426
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

The Hindu : News / National : Govt. to free diesel prices; no such proposal for LPG

Deregulation seems to be here :(
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Old 24th April 2012, 21:54   #427
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

This is humbug. The current government has too much on it's hands, and is wary of losing support from the already angry allies. That's why things like FDI in retail, diesel price being left out etc etc come into play by the guys sitting in delhi. No way diesel price can be increased, as the Fm himself has commented last year that if diesel prices are freed then the cascading effect on end commodities will have a drastic upwards spiral adding to inflation.
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Old 24th April 2012, 22:04   #428
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Ford5 View Post
This is humbug. The current government has too much on it's hands, and is wary of losing support from the already angry allies. That's why things like FDI in retail, diesel price being left out etc etc come into play by the guys sitting in delhi. No way diesel price can be increased, as the Fm himself has commented last year that if diesel prices are freed then the cascading effect on end commodities will have a drastic upwards spiral adding to inflation.
nice way to console one self if they have bought a diesel car paying atleast 2 lakhs more than the petrol counterpart. Deregulation of diesel was always on the cards. UPA will call TMC's buff and go ahead with its implementation. It doesnt make sense in common man paying more for petrol as against diesel. There should be some sort of normalization at some point of time. I hope this happens sooner than later. Let us hope all the economists get their head straight.
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Old 24th April 2012, 22:09   #429
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by GTO View Post
I agree Zaphod. Its an irony that a person on a Rs. 40,000 scooter pays more for a litre of petrol than someone in a Mercedes CDI next to him. Diesel subsidies must be waived off to everyone but the mass transport segment.
Why provide a subsidy for even the mass transport segment? That would open up the people in the transport segment to setup an illegal diesel shop. What could be better is for the transport segment to get a fuel credit/deduction on their annual gross income when they file their annual taxes. Whenever there is an exception or a hole, it is going to be exploited/abused. Then there is the subsidy for farmers to run their diesel pumpsets. It would be crazy for a farmer to file taxes, but perhaps, the billions spent on subsidy can be used to provide electricity for those pumpsets. Or provide farmers more subsidy towards fertilizers, seeds, and pesticides. Just leave out diesel.

Burning a big chunk of tax revenue in subsidies is just plain wrong. It will serve the country much better when that income is spent on forward looking, country building investments.

Last edited by prasadee : 24th April 2012 at 22:13.
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Old 24th April 2012, 22:16   #430
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by MutantX View Post
Let us hope all the economists get their head straight.
Well for the past 7-8 years or so the Chief economists in Delhi have believed only in populism, which is another form of rudimentry economics which help keep the ruling party in power. And within 2 years a General election looming in the face of this party, I doubt they have the real guts to bother about happy urban diesel car owners and face the wrath of rural and poor india.

I'm all for market driven rates as it would really force us Indians to think on how to not import 80% of crude supplies.
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Old 25th April 2012, 00:03   #431
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I find it quite amusing that a lot of petrolheads start making noise (about subsidies) on one of these threads everytime the news channels/blogs/websites bring out some new input on de-regulation of diesel. What is more amusing is that (probably) most of these petrolheads would have bargained to all ends possible, stating the fuel cost difference when they bought their petrol cars, but still out here would crib about diesel car owners taking "benefit" of the price difference

As for me, I'm all in for de-regulation - do note when that happens, don't expect the oil-companies to increase the prices immediately. Like (de-regulated) petrol, expect the government to have an invisible hand in "regulating" the oil companies to increase the diesel prices.

Also, please understand the tax structure should/would remain the same, so we'll still see a good difference in the price of diesel and petrol post de-regulation.
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Old 25th April 2012, 01:25   #432
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I frankly don't understand the debate on this. I can't think of a single reason for diesel subsidies on private cars, it is a completely insane use of resources that could be better utilized to serve the seriously disadvantaged in a country like ours.

We behave as if we have solved all our problems and can be casual and debate about subsidizing private vehicle owners, who don't need it. We don't need the cooking gas subsidy either which is another wasteful use of scarce resources which needs to be diverted to those who need help.

And I don't think anyone can come up with a reason without being insincere and worse self serving. Believe me as an Indian if you can afford a diesel vehicle you don't want a subsidy when you know in your heart that money could be used for a much much better cause. We get worked up about so many things that are not right in the country, yet just because one owns a diesel car shouldn't make this ok or defensible. Sure one can argue about the 1000 things wrong in the country but how does that make diesel subsidies to private vehicles right.

This is not to say that diesel users should feel guilty, if its available decision making will obviously factor it. But logically, rationally, from an economic and good governance perspective subsidies should be directed at those who need them rather than a blanket policy that only leads to misuse, unnatural markets, misdirection and waste. Folks who need assistance are those who are completely deprived, have no source of income, on subsistence, depend on government welfare etc

Providing food stamps or cash to these folks is better than subsiding diesel which is actually subsiding people who don't need it, for instance employers by allowing them to get away by paying less, because any working person should be able to afford things sold at market prices, why keep prices artificially low, who is this benefiting and who are we subsidizing? These sort of artificial constraints ultimately benefit a few people, create market inconsistencies and slows down the economy.

Last edited by raul : 25th April 2012 at 01:44.
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Old 25th April 2012, 07:10   #433
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

The debate is on the implementation angle of the subsidy regime. State RTCs have represented that they and the Railways, who are the two biggest consumers of diesel be put under a special subsidy regime. The issue is to to prevent leakage from their stores and the creation of a black market. A good example is to look at the kerosene market. some kind of chemical coloring may be in the offing too.
A big iceberg hiding is the private genset market which is estimated to be at least 1.4 Gw ( giga watt0
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Old 25th April 2012, 07:56   #434
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Default Diesel Prices to go up? Deregulation on the cards!!!

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Govt to let market determine rate

The price of diesel may go up as the government has agreed to make the prices “market determined.”

The announcement came on Tuesday in the Rajya Sabha in the form of a written reply by Minister of State Namo Narain Meena. The minister, however, said the government did not propose to deregulate prices of cooking gas.

“(The) government has, in principle, agreed to make prices of diesel market-determined. There is no proposal at present to fully de-regulate cooking gas prices,” Meena stated, sparking protests from BJP members. The members of the main Opposition party said the move would have a cascading effect on overall prices of commodities since diesel “is the basic transport fuel”. “The government wants to help the oil mafia by taking the in-principle decision on diesel price deregulation,” BJP vice-president Mukhtar Abbas Naqvi said.
Source
  • Do you think this will really happen?
  • What do you think the Govt. will do keep food inflation and other economic barometers under permissible limits?
  • Lastly how much do you expect the price to go up?
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Old 25th April 2012, 08:07   #435
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Default Re: Diesel Prices to go up? Deregulation on the cards!!!

It should definetely happen in a phased manner at least. The subsidy culture is very bad and we Indians are being made parasites by the government by feeding us with various subsidies and schemes. In an open market where every commodity price is dependant on demand and supply and international market prices then why petroleum products should be regulated and subsidised.

In fact subsidy is an hidden agenda of the governments to increase their vote banks and to make people dependant on government schemes. Government rather than providing employment and making the common man or the poor class work and earn their livelihood is putting them into the habit of living out of government schemes wherein they get free ration, free houses, free power, free water, free education, free money by way of NREGS, etc., etc., and thereby making the poor class lazy and parasites and thereby the poor labour class is losing its ability and instinct to work.

Hence subsidy for anything be it petroleum sector, argiculture sector, etc., etc., should stop and people should be made to work and earn for their requirements. God save our country.
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