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Old 29th April 2012, 14:24   #511
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

There may not be ad hoc measures lest they become cause of malady later.

No use talking about more widespread ill of corruption.

Diesel should be sold at market rates, so should be petrol and auto LPG. They should be subjected to similar rates of tax too. No point taxing diesel Rs. 7 / litre and petrol Rs. 27 / litre. Government is only forcing the consumer to shift to diesel which in turn burdens the Government more.
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Old 29th April 2012, 15:14   #512
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

All I would like to say is that there should not be any discrimination for the price of the same commodity for different persons. If someone is earning more, he is paying more taxes too. More you earn, more taxes you pay. So why you also pay more for diesel? That is my only point.
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Old 30th April 2012, 16:54   #513
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Hello,

Read news that the Indian Prime Minister has signaled Fuel Price Hike.

IOC has also desperately asked for Fuel Price Hike. Also with falling Rupee it seems that next round of Fuel Price is round the corner.

It would be really interesting to see whether Government dares to touch Diesel Prices this time. Also read a blog today that 2012 is last chance for Government to introduce tough Economic Reforms.

Let us wait & watch as the drama unfolds. It would be very interesting to see if Government plans to increase Diesel Prices, how will it convince regional Political Parties.

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Old 30th April 2012, 17:37   #514
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I don't see any major increase in Diesel prices in the near future. The present govt is facing a lot of problems already and are in no position to also opt for an early elections. Any increase in Diesel prices is going to be vetoed by the regional coalition partners and it won't see the light of the day. Also if the govt was really so worried about losing revenue on sale of diesel to private car owners then I am sure it would have gone against the Automobile companies and increased the excise on diesel cars making them more costlier. But it did't. So I don't see any reason for them increasing the prices now.
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Old 30th April 2012, 17:58   #515
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by drmohitg View Post
I don't see any major increase in Diesel prices in the near future. So I don't see any reason for them increasing the prices now.
Hello DRMohitg,

So do you mean to say that we will see another Rs. 5 hike in Petrol prices & no hike in Diesel Prices?

If this is the case even then Government is in serious trouble. Because apart from Cars, major consumers of Petrol are Two Wheelers owners. And we all know that Two Wheelers are literally lifelines of Rural India & in Metro cities other than Mumbai.

Thus any further hike in Petrol prices without corresponding hike in Diesel Prices will also hurt the Government, in this situation from Middle Class. Already auto LPG & CNG prices has increased by Rs. 6 - 7 last month & it is only Diesel that is selling at loss to exchequer.

Once again, I am of opinion that 2012 is final chance for Government to introduce some tough fiscal measures. They can futher roll-out some goodies in 2013 so that people forget prices hikes in 2012.

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Old 30th April 2012, 18:05   #516
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Jignesh View Post
Hello DRMohitg,

So do you mean to say that we will see another Rs. 5 hike in Petrol prices & no hike in Diesel Prices?

Once again, I am of opinion that 2012 is final chance for Government to introduce some tough fiscal measures. They can futher roll-out some goodies in 2013 so that people forget prices hikes in 2012.
Well at best I see a hike of less than Rs 2 or 3 in Diesel prices. See the problem is that the same middle class will be actually hurt a lot more immediately with an increase in diesel prices. It would raise the prices of all commodities etc and we know that our govt is not capable of controlling those things. Also to be honest it is not in the govt's hand (INC) anymore to raise the prices. The allies would veto it down and it won't happen. Atleast thats how I feel though you never know what our PM has in his mind. I still have faith in him.
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Old 30th April 2012, 18:08   #517
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by Jignesh View Post
we will see another Rs. 5 hike in Petrol prices & no hike in Diesel Prices?
Actually the OMCs are asking for a hike of Rs 10 per liter of petrol in Delhi and surely will be even higher in other places. No prizes for guessing how they arrived at that no. as has been rightly pointed out in this thread that they were asking for Rs 4 when the crude price was higher and now that it is lower, they want Rs 10. They are also making some noise about diesel but given that touching diesel now will most definitely drive the WPI and CPI through the roof, the government will never touch diesel now or in the future.

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Atleast thats how I feel though you never know what our PM has in his mind. I still have faith in him.
No offense meant at all but you will be surely counted among the very rare citizens in our country who think this way

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Originally Posted by Relativity View Post
Is it correct to say that if Diesel subsidy is removed, it will cost the same at Shell and other pumps? shell is selling Diesel at rs. 63 at the moment in Chennai.
That my friend will depend on Alladin's secret formula owned by the OMCs and the government currently protected by the national secrets act.

Last edited by samarjitdhar : 30th April 2012 at 18:16. Reason: multiquoted
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Old 30th April 2012, 18:12   #518
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

As long as they don't touch Diesel, I am happy. Is it correct to say that if Diesel subsidy is removed, it will cost the same at Shell and other pumps? shell is selling Diesel at rs. 63 at the moment in Chennai.
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Old 30th April 2012, 18:15   #519
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by drmohitg View Post
Well at best I see a hike of less than Rs 2 or 3 in Diesel prices. See the problem is that the same middle class will be actually hurt a lot more immediately with an increase in diesel prices.
Quote:
Originally Posted by samarjitdhar View Post
They are also making some noise about diesel but given that touching diesel now will most definitely drive the WPI and CPI through the roof, the government will never touch diesel now or in the future.
Hello Drmohitg & Samarjitdhar,

Even I was of the same opinion couple of days back - Government will not dare to touch Diesel Prices before 2014 elections.

But, given the rating downgrade & balance of payment deficit along with fiscal deficit, it seems govenrment will either have to reduce taxes on Diesel or increase the Diesel prices atleast by Rs. 3 or Rs. 5.

In my opinion, government is currently in very bad situation & will have to take some tough decision on Diesel Prices. Rising Rs. 5 or more on Petrol will only create further problems for Government. Any futher increase in Petrol prices will increase consumption of Diesel, which will further increase fiscal deficit, which Government cannot handle.

Let us wait & watch the drama next couple of days. The next fuel price hike can come in matter of days.

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Old 30th April 2012, 19:01   #520
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Jignesh View Post
But, given the rating downgrade & balance of payment deficit along with fiscal deficit, it seems govenrment will either have to reduce taxes on Diesel or increase the Diesel prices atleast by Rs. 3 or Rs. 5.
As I have been highlighting earlier, the majority of the taxes collected on diesel is pocketed by the states. Sometimes as much as 5000 crores annually which is a significant amount for any state without having to do a single thing to earn that tax. The center only receives Rs 3 per liter as excise. The center could do a token hike of Rs 3 to 5 on diesel and agree to forego the excise it collects or turn the table around against the regional parties and allies who are crying wolf asking them to forego their tax collections on diesel.

I too read about the payments crisis currently with the import bill now well above our exports. Add to that the RBI has spent around $26 billion to shore up the currency which has now reduced the government's ability to carry on payments for only 6 months. Frankly the government simply doesn't know which bullet to bite because the same article quoted increase in diesel prices will surely put inflation in double digits. All this could have been avoided had the government been not a party to corruption, scams, ensured proper tax collections, etc. the list is actually endless. And to think all this is somehow to this discussion.

Quote:
Originally Posted by Jignesh View Post
Let us wait & watch the drama next couple of days. The next fuel price hike can come in matter of days.
Even before that the government has now a more vexing puzzle to solve around the presidential elections. Diesel price revision if at all will wait for a while.
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Old 30th April 2012, 19:51   #521
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Another issue is that the taxes levied is a percentage of the cost price. So any increase in fuel price paid to the OMCs leads to a cascading effect. Governments should start to implementing a fixed rate for taxes. Each time the prices are hiked the fuel comapnies get their due but the government actually takes up a large part of it.
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Old 1st May 2012, 15:27   #522
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by coldice4u View Post
Another issue is that the taxes levied is a percentage of the cost price. So any increase in fuel price paid to the OMCs leads to a cascading effect. Governments should start to implementing a fixed rate for taxes. Each time the prices are hiked the fuel comapnies get their due but the government actually takes up a large part of it.
That is what I am saying all along.

Taxing by percentage is fine if the price fluctuation is within a small band. If the fluctuation ( read increase) is huge, then it results in cascading effect.

When I bought my first car, diesel was Rs.9 / litre. Now it is Rs. 45 / litre. The Govt gets 4.5 times the tax now. Which is hardly justifiable.

Heard Auto LPG prices are reduced by Rs. 5 a litre to Rs. 50 / litre.
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Old 3rd May 2012, 15:36   #523
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

The future doesn't look too bright, link

I wonder how this figure, "lose Rs 480.50 per cylinder on sale of cooking gas", is derived. As one bhpian pointed about in his detailed analysis, natural gas is a by-product of refining crude. So how does that translate into ~900 Rs. Per cylinder of cooking gas, as claimed by oil companies.
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Old 3rd May 2012, 17:13   #524
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Optimus7 View Post
The future doesn't look too bright, link

I wonder how this figure, "lose Rs 480.50 per cylinder on sale of cooking gas", is derived. As one bhpian pointed about in his detailed analysis, natural gas is a by-product of refining crude. So how does that translate into ~900 Rs. Per cylinder of cooking gas, as claimed by oil companies.
Gas in cylinder supplied for cooking is Propane (LPG) and not natural gas (CNG - compressed natural gas). Propane is derived from crude, while LNG is natural gas recovered from the oil/gas fields.

Propane liquefies under low pressure, hence is a safer fuel compared to CNG which requires very high pressure.
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Old 3rd May 2012, 17:58   #525
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by Aroy View Post
Gas in cylinder supplied for cooking is Propane (LPG) and not natural gas (CNG - compressed natural gas). Propane is derived from crude, while LNG is natural gas recovered from the oil/gas fields.

Propane liquefies under low pressure, hence is a safer fuel compared to CNG which requires very high pressure.
Ok, but since Propane(LPG) is derived from refining crude, its 2 mangoes with 1 stone for the oil companies, isn't it. By refining crude, they get petrol/diesel as well as LPG. So, how does this translate to ~900 rs per cylinder? Cost of cylinder is a 1 time investment, only thing left to do is, manufacture, re-fill and transport.
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