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Old 29th May 2012, 14:20   #691
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Post re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by PatchyBoy View Post
What percentage are we talking about here? Percentage of diesel private cars? Percentage of diesel consumed by these cars?

Rajan
Should have mentioned that! Thats the figure quoted to be consumed by SIAM as percentage of diesel consumed by these cars (white / yellow boards, cars / jeeps included).

Whether yellow board cars need to be subsidized or not would be another topic though!
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Old 29th May 2012, 14:42   #692
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by babu.sundaram View Post
Should have mentioned that! Thats the figure quoted to be consumed by SIAM as percentage of diesel consumed by these cars (white / yellow boards, cars / jeeps included).

Whether yellow board cars need to be subsidized or not would be another topic though!
That figure was widely argued upon. And I remember the originator of the figure later clarified that the data was flawed. And in my memory the figure was quoted by CSC (and used by Kirith Parekh committee), not SIAM.

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Why not ask Indus Towers to buy diesel at the market rate if they are purchasing directly from the OMCs? I am a bit intrigued by the amount being used by these top three consumers. It might be well be that these three biggies who purchase from the OMCs directly account for the rest of the Rs 17000 crore under-recovery since their sales would be off the retail numbers submitted by the OMCs. On the other hand I am sure the retailers sell to some of the small scale industries relying on diesel. Not sure though.
Let me give a bit of background. Indus towers is a JV between Airtel, Vodafone and Idea. All private. Other big players are GTL, Reliance Infratel & Bharti Infratel. All private. The sole local fellow is BSNL/MTNL.

Now if someone tries to figure the diesel consumption by these companies, they wouldn't come under a section "Mobile Towers". They'd rather put it under infrastructure. And opt for the goodies layed by the government in the name of infrastructure development. So why would they pay the market rate, when they get it at a discount.

Also let me make it clear, that even though the diesel is bought and consumed by these guys, the bill goes to the mobile operators. I can explain the logic behind this, as well as why the need for diesel and so on, but that'll be the discussion of another thread.

P.s. Been part of this industry, and hence the know-how.
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Old 29th May 2012, 14:47   #693
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by babu.sundaram View Post
Should have mentioned that! Thats the figure quoted to be consumed by SIAM as percentage of diesel consumed by these cars (white / yellow boards, cars / jeeps included).

Whether yellow board cars need to be subsidized or not would be another topic though!
OK Sir. Let us assume that 15% of all diesel that is consumed in India is being consumed by these cars. Are we trying to communicate that the remaining 85% is being used for the purposes for which the subsidy was created, to start with?

If not, then how is it fair to penalize 15% of the offenders, while the remaining unknown % go scot free? I am not pro-subsidy or anything. My point is, when there are multiple players who are misusing the subsidy, why target only the most visible?

BTW, how many of these babus do you think have petrol cars? Heck, how many government owned cars do you think are petrol driven? Aren't they blatantly misusing the subsidy on the one hand, while crying foul on the other?

Rajan
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Old 29th May 2012, 14:51   #694
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Also let me make it clear, that even though the diesel is bought and consumed by these guys, the bill goes to the mobile operators.
Which will then be passed on to the consumers. But surely the difference when divided over millions of consumers won't be that much which could get the end users . IMO probably this is a low hanging fruit the government could go for to start with getting significant returns in the process.
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Old 29th May 2012, 14:54   #695
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by ninjatalli View Post
Also let me make it clear, that even though the diesel is bought and consumed by these guys, the bill goes to the mobile operators. I can explain the logic behind this, as well as why the need for diesel and so on, but that'll be the discussion of another thread.
I agree. In fact I read somewhere (dangerous statement that!) that diesel is now cheaper than furnace oil. so now diesel is being used in place of furnace oil. So diesel prices should be hiked at least to prevent substitution for furnace oil. That is across the board for all users, no 15% or 5% calculations there.
I am only stating what I know; hope the messenger isnt shot!
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Old 29th May 2012, 14:56   #696
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by babu.sundaram View Post
Should have mentioned that! Thats the figure quoted to be consumed by SIAM as percentage of diesel consumed by these cars (white / yellow boards, cars / jeeps included).
Saw the SIAM chap on the box. He stated a figure of 1%.

The usual suspect CSE is again crying out against diesel vehicles. Now she will be biting the hand that fed her once upon a time.
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Old 29th May 2012, 15:36   #697
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

What happens to all the manufacturers who have announced investments into ramping up the capacities of their diesel engine making plants if Jaipal Reddy gets what he seeks?

Can any one tell me what is the additional burden ( by the way of transportation costs and other related ones) if diesel price is raised by Rs. 10 / litre for transport of goods ( read, vegetables and other essentials) over a distance of 300 kilometres?

Why cant the toll taxes be rationalized if the Govt is so concerned with the increase in cost of transportation?

It is natural for buyers to prefer cars with lower fuel costs. One need not blame them. It is natural for some petrol users to get irritated by the huge difference in the prices of the two fuels. One need not blame them, too.

Also, it creates certain impression in petrol users that they are being overly penalized by the Govt. This is due to the fact that petrol prices are frequently raised compared to diesel.

I hear petrol and diesel cost almost same at the refinery and that petrol is taxed more. State Govts are main culprits here ( atleast AP). They tax petrol at 33 %, which is ridiculously high. Tax on diesel is 22 %. If the States address this disparity and peg taxes for both the fuels at same, lower levels, then the consumers may not feel the pinch.

AP gets about 3200 crores per annum in taxes on petrol. If it reduces its tax by half, is it ready to fore go the 1600 crores of revenue which it gets without doing any thing? It can only collude with unscrupulous elements to give thousand of acres of valuable land at throw away prices.

Govt knows the public have no options other than fossil fuel using motor vehicles. It also knows that people are so habituated that they cannot stop using motor vehicles even for small distances. So it raises prices without reducing the taxes on it.

Bear IT. Or Quit Using Cars.

Last edited by simplyself : 29th May 2012 at 15:39.
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Old 29th May 2012, 15:41   #698
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*



Rationalizing prices not possible per Jayapal reddy. Article in today's newspaper

Govt is planning to add some tax on diesel vehicles. Expect diesel vehicle prices to go up. People who are on the lookout for a diesel car, plese sign the cheque immediately.
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Old 29th May 2012, 15:45   #699
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

They do not have a clue. In my opinion bite the bullet, do away with all so called subsidies, and use Aadhar as a base for direct cash transfers to the needy folk. If they want to 'subsidise' announce a figure of, say, Rs.5.00 per litre, and then let the rest of price be market driven!
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Old 29th May 2012, 15:55   #700
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Post re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by ninjatalli View Post
That figure was widely argued upon. And I remember the originator of the figure later clarified that the data was flawed. And in my memory the figure was quoted by CSC (and used by Kirith Parekh committee), not SIAM.
Quote:
Originally Posted by sgiitk View Post
Saw the SIAM chap on the box. He stated a figure of 1%.
The usual suspect CSE is again crying out against diesel vehicles. Now she will be biting the hand that fed her once upon a time.
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Originally Posted by PatchyBoy View Post
OK Sir. Let us assume that 15% of all diesel that is consumed in India is being consumed by these cars. Are we trying to communicate that the remaining 85% is being used for the purposes for which the subsidy was created, to start with?
Sirs, the point is, it does not matter what percentage is being misused / plugged. This is an issue that pricks sentiments (with all the twists), even among an educated community such as tbhp. We have so many diesel vehicles plying around which keeps reminding and can be used against the ruling morons (at elections). This is being made such a mess just because of it.

Subsidy bill wont go down by fixing cars and would only delay the inevitable. Being short termed, why would rulers intellectuals not leverage whatever runway one would get?
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Old 29th May 2012, 16:20   #701
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by ninjatalli View Post


You are clearly not getting the point then. We are not defending the "subsidy". We are questioning the basis of it. We are doubting the existance of the "subsidy" (wrt to diesel). As for reduced price by the OMC, if there is a gap (wrt market prices), we are all game for it. That is what de-regulation is supposed to be.
Hey, was trying to quote you and thanked you To the point clearly whatever the internal calculation there is a subsidy on diesel hence the huge disparity between diesel at 45 and petrol at 80, unlike in other markets where the 2 fuels are closely priced , and infact diesel slightly more.
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Old 29th May 2012, 20:49   #702
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by raul View Post
Hey, was trying to quote you and thanked you To the point clearly whatever the internal calculation there is a subsidy on diesel hence the huge disparity between diesel at 45 and petrol at 80, unlike in other markets where the 2 fuels are closely priced , and infact diesel slightly more.
Here is all the internal calculation from here. To say the least, it is outrageous

Attaching documents so others do not have to go to IOCL website and search

Price Build up sensitive products.pdf
Price_buildup_of_MS.pdf

Rajan
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Old 29th May 2012, 21:57   #703
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by PatchyBoy View Post
Here is all the internal calculation from here. To say the least, it is outrageous

Attaching documents so others do not have to go to IOCL website and search

Attachment 933740
Attachment 933741

Rajan
Wow. Now that is news to me. Thanks for sharing the same. Haven't got the bandwidth to compare the calculations/breakup of both the documents, hopefully someone can validate the numbers.

Btw this is a more appropriate link for the same attached files. The link is on the Petroleum Planning & Analysis Cell website.

Last edited by ninjatalli : 29th May 2012 at 21:58.
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Old 30th May 2012, 09:53   #704
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Looks like the higher excise duty on diesel cars talked about for so long may finally become a reality. A flat Rs.80000/- across the board may be rather unfair. I hope they think of a slab system.

Jaipal Reddy seeks higher duty on diesel cars - The Times of India
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Old 30th May 2012, 10:54   #705
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by wilful View Post
Looks like the higher excise duty on diesel cars talked about for so long may finally become a reality. A flat Rs.80000/- across the board may be rather unfair. I hope they think of a slab system.
Hello Wilful,

This proposal of hike in duty on Deisel is around since long time now, but nothing has materialized. Infact in March 2012 this threat was well advertised by Car Manufacturers & they managed to post record Car sales of Diesel Variants.

But what you have said is correct - slab system. even if duty on Diesel Cars is increased, it should be in slabs, such that Luxury Car pays the most tax & Small Diesel Cars pays the lowest tax.

Thanks,
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