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Old 7th June 2012, 14:37   #721
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Interesting Article by Economic Times. Not that one can trust their information completely, but it does give you a general picture of the situation.

So many times the discussion has veered on diesel usage by different sections other than private car owners, here's a perspective of one of the top consumers of the fuel in the country.

A few points to consider
  • The total number of towers being 4,00,000 is a bit too hyped up. The actual number would be around 60-70% of that figure.
  • The percentage figure of towers running on diesel generators and on electricity is unfortunately quite true. A lot of these towers still do not have 24X7 power connectivity. However every mobile user demands full coverage, whatever be his position. Hence the role of the generator.
  • The calculated figure of 8760 litres might be actually more, considering the article doesn't talk of fuel pilferage from the generators which is a concurrent & repeated theft happening at the mobile towers, across all over the country. Consider a possible upside of 15-25% increase in that figure.
Quote:
Telecom towers eating away diesel subsidy to the tune of Rs 4,300 crore per year


NEW DELHI: Telecom Equipment Manufacturers' Association of India (TEMA) in a letter to the Prime Minister, Manmohan Singh said that telecom towers were eating away diesel subsidy to the tune of Rs 4,300 crore per year. TEMA said the dependence on off-grid energy sources such as diesel generators sets has increased rapidly and cited a TRAI recommendation on green telecommunications.

TEMA said the number of telecom towers essential for providing connectivity to all areas has also gone up exponentially. As per TRAI figures, the total number of telecom towers in the country at the end of 2010 was about 400,000. It is estimated that presently India has about 500,000 telecom towers with an average power consumption of around 3-4 kW per tower site.

TEMA said that almost 60% of the power requirement of telecom towers is met through use of Diesel Generator sets (DG Sets). The electricity available at the sites across major circles varies from 7-21 hours per day. There are hundreds of sites whose dependence on DG sets is almost 100%.

As per the TRAI recommendations issued in April 2011, approximately 8760 litres of diesel is consumed per year per site (assuming that on an average each site is operating for almost 8 hours on DG set), which works out to around 3.5 billion litres of diesel consumption by telecom towers alone. This alarming fact was even pointed out by the then Environment Minister Jairam Ramesh, in June 2011, who had justifiably questioned the subsidy benefit to the telecom operating companies and had advocated for its withdrawal.

The subsidy works out to more than Rs 85,000 per tower per annum. This simply translates to a mind boggling figure of a total loss of more than Rs 4300 crore per annum to the exchequer.
As per industry estimates, with the evolution of new technologies and services and for the extension of the telecom networks to unconnected rural and other areas, the country is expected to add another 300,000 towers in next five years. Unless there are strong regulatory guidelines to enforce the implementation of power efficient solutions and to mandate the implementation of Green Tower sites using renewable energy alternates, the existing trends will continue and likely consumption of diesel would grow to almost 7 billion litres with the new additional towers in the next 5 year timeframe. Consequently the amount of CO2 emission is also going to take alarming proportions much more than the present figure of over 6 million tones.

Last edited by ninjatalli : 7th June 2012 at 14:44. Reason: Added link
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Old 7th June 2012, 15:05   #722
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

@ninjatalli; The title of the article is itself wrong. Where is the subsidy? The total 'take' in taxes, levies, etc. is quite a bit more more than the so called subsidy, ie 'give'. The govt is still making money out of every lire of diesel sold.

They have accepted as much. The response, how will we fund the welfare schemes (like MNREGA, NRHM etc. - Italics mine). What is not mentioned are the elections as well!
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Old 7th June 2012, 15:15   #723
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by ninjatalli View Post
The total number of towers being 4,00,000 is a bit too hyped up. The actual number would be around 60-70% of that figure.
Hello Ninjatalli,

I have raised this issue many times in this thread - Why should Mobile Towers & Volvo Buses get subsidized Diesel.

Anyways, I am not getting into that matter of Diesel Consumption here. But I feel Government should make use of Solar & Wind Power Mandatory for Mobile Towers.

I believe this will save lot of Diesel, Electricity & promote clean energy in Mobile Industry.

Thanks,
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Old 7th June 2012, 15:43   #724
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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 Ninjatalli,

I have raised this issue many times in this thread - Why should Mobile Towers & Volvo Buses get subsidized Diesel.
If subsidy is removed, the cost burden would be passed on to us, customers only. Operators will take this oppurtunity to raise prices by 100 for a volvo ticket (city to city) and 10p per call for mobile users.

I would suggest the subsidy to stay for as long as possible as this is one facility used by tax paying middle class white moneyed common man.

Last edited by scopriobharath : 7th June 2012 at 15:45.
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Old 7th June 2012, 16:26   #725
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by scopriobharath View Post
If subsidy is removed, the cost burden would be passed on to us, customers only. Operators will take this oppurtunity to raise prices by 100 for a volvo ticket (city to city) and 10p per call for mobile users.
Hello Bharath,

Subsidy should be meant only for poor people. Middle class by no means should get subsidy.

Just for a example, if one can afford to Pay Rs. 450 for Mumbai - Nashik (170 kms) in Volva, they can also afford to pay Rs. 550 for same ticket (if subsidy is removed).

Similarly for Mobile consumers, if mobile tariffs go up by 10% it will not effect 99% of the Mobile Customers.

But what it will do is stop the misuse of Diesel Subsidy & the same amount can be used for better schemes for Poor class.

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Old 7th June 2012, 16:31   #726
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

For heavens sake there is no 'subsidy' on diesel, it's just that they are not making as much profit on diesel as they are on petrol. Frankly I do not understand how and why forummers can tow the standard govt lines and some articles paid for by the obscenely rich oil companies paying drivers salaries of 44 lakhs/annum.
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Old 7th June 2012, 18:39   #727
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by Jignesh View Post
Subsidy should be meant only for poor people. Middle class by no means should get subsidy.
Hi Jignesh - I agree to this but I would like to know what benefit the Govt is giving the average tax paying middle class. Let there be 1000 schemes for poor people, but let there be one facility or luxury in govt terms for tax payers.

For a start - I pay my tax and i dont have any black money. What is the govt doing for me. Petrol is sky-rocketing, Inflation is high etc etc. Toll is charged for years and years after the money is recovered. Govt also promotes say IT and BPO in india. So does govt expect me to drive a tractor to work or say a bullock cart? Middle class can afford a 2Wheeler and say upto a Santro. There must be something for middle class. If govt is purely agriculture based, why are they encouraging setting up auto plants and promoting IT&BPO etc. They must be promoting only Tractor manufacturers. Only Caterpillar and John Deere must have allowed to have plant in india and not Audis and BMWs & other IT & BPO Firms.

At the very least, Let govt give diesel at a cheaper price. Middle class tax payers will benefit from this. Is it not the duty of the govt to do something for the middle class also.

Let the diesel subsidy or whatever price difference continue and let middle class benefit by it. Even if profit is made, most money would go into pockets of corrupt people and not really go into development.

Last edited by scopriobharath : 7th June 2012 at 18:43.
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Old 7th June 2012, 18:59   #728
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

It may be, but the fact is that all indirect taxes affect the poor much more than the rich. The only equitable thing to do is to get rid of all indirect taxes (as in US), and have only Income Tax (in its various avatars - Income, service, professional etc), as those who are earning can afford to pay the tax. The cost of almost all things will decrease, increasing buying capacity of most of the individuals.

Where ever the Government wants, it can give direct subsidies - doles, stamps and/or government services (Transport, Medicine etc). No need to have subsidised ration or fuel or any thing.
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Old 7th June 2012, 22:12   #729
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by ninjatalli View Post
...
So these guys now too have started staking out their interests to protect profits . Well why grudge them at all when there is this disparity in fuel prices in the first place due to differential taxation.

These are powerful lobbies who will figure out a way to protect their interests in one which way or the other, read greasing of the palms. I fear that in the end it is us private diesel car users who are being repeatedly bashed up might end up paying the price. Who knows the government might be inspired to create a Diesel Police force just to punish us . That way its a great diversion from the complete incompetence of the government in failing to create enough power generation mechanisms, develop better public transportation, oh wait this post will get too long now. I rest my case.
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Old 12th June 2012, 20:56   #730
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

All diesel dream can go for a complete toss if this comes true Govt may slap Rs 1.7 lakh tax on small diesel vehicles - The Economic Times
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Old 12th June 2012, 21:04   #731
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by tj123 View Post
All diesel dream can go for a complete toss if this comes true Govt may slap Rs 1.7 lakh tax on small diesel vehicles - The Economic Times
As usual the above mentioned ET link is taking ages to open. Could you please copy paste the content of that article over here so that we don't have to wait endlessly to know its details. Thanking you in advance.
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Old 12th June 2012, 21:07   #732
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

From the article above
Quote:
The government plans to slap additional levies of Rs 170,000 on small diesel cars and Rs 255,000 on medium and large diesel vehicles to check dieselization of economy due to wide gap between petrol and diesel prices.

"The oil ministry has asked the finance ministry to impose additional excise duty on diesel cars and the matter is under consideration," a government official said.

Oil ministry officials confirmed that its proposal was "favourably" considered. "The money thus raised could be used to meet part under-recoveries (revenue losses of state oil firms in selling fuels below market rates)," an oil ministry official said.

The government expects that the levy would help it in meeting about Rs 10,000 crore annual revenue losses of state oil firms in selling diesel below market rates.

Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum had lost about Rs 81,000 crore revenues in 2011-12 due to a freeze in diesel rates.

Diesel price is frozen in the country for almost a year due to political reasons and it is almost 74% cheaper than petrol, which is a major disincentive for buying petrol vehicles.

Diesel is sold at Rs 40.91 a litre in New Delhi, more than Rs 30 a litre cheaper than petrol.

Quote:
Originally Posted by tj123 View Post
All diesel dream can go for a complete toss if this comes true Govt may slap Rs 1.7 lakh tax on small diesel vehicles - The Economic Times
Quote:
Originally Posted by AutoIndian View Post
As usual the above mentioned ET link is taking ages to open. Could you please copy paste the content of that article over here so that we don't have to wait endlessly to know its details. Thanking you in advance.
If they really want to do a delayed tax levy (like they tried in the Vodafone case?) on the general public, they should apply to all existing diesel vehicles. Instead of charging 2L to a new vehicle, they can apply a 20K tax to all existing diesel vehicles.
There is no point in applying to only new diesel vehicles. Who in their right mind would buy a diesel car then? Breakeven with a petrol car would probably go up to 25 years!

Quote:
Originally Posted by scopriobharath View Post
Middle class can afford a 2Wheeler and say upto a Santro. There must be something for middle class. If govt is purely agriculture based, why are they encouraging setting up auto plants and promoting IT&BPO etc. They must be promoting only Tractor manufacturers. Only Caterpillar and John Deere must have allowed to have plant in india and not Audis and BMWs & other IT & BPO Firms.

At the very least, Let govt give diesel at a cheaper price. Middle class tax payers will benefit from this. Is it not the duty of the govt to do something for the middle class also.
Just trying to clarify a few things here.

I dont see how diesel subsidy would help middle class people who are using 2 wheelers or Santros. Unless you mean to say by keeping the transport prices in check for all goods. Which isnt really in check in any case, but thats another point.

Also, when Govt promotes industries other than agriculture it promotes employment. Mostly for the middle class. How much they pocket in the bargain is another story again.

Last edited by selfdrive : 12th June 2012 at 21:15.
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Old 12th June 2012, 21:10   #733
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by AutoIndian View Post
As usual the above mentioned ET link is taking ages to open. Could you please copy paste the content of that article over here so that we don't have to wait endlessly to know its details. Thanking you in advance.
I am able to open this link real quick any ways ......Here you go

Govt may slap Rs 1.7 lakh tax on small diesel vehicles
(ET)
12 Jun, 2012, 07.45PM IST, The writer has posted comments on this article Rajeev Jayaswal,ET Bureau

NEW DELHI: The government plans to slap additional levies of Rs 170,000 on small diesel cars and Rs 255,000 on medium and large diesel vehicles to check dieselization of economy due to wide gap between petrol and diesel prices.

"The oil ministry has asked the finance ministry to impose additional excise duty on diesel cars and the matter is under consideration," a government official said.

Oil ministry officials confirmed that its proposal was "favourably" considered. "The money thus raised could be used to meet part under-recoveries (revenue losses of state oil firms in selling fuels below market rates)," an oil ministry official said.

The government expects that the levy would help it in meeting about Rs 10,000 crore annual revenue losses of state oil firms in selling diesel below market rates.

Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum had lost about Rs 81,000 crore revenues in 2011-12 due to a freeze in diesel rates.

Diesel price is frozen in the country for almost a year due to political reasons and it is almost 74% cheaper than petrol, which is a major disincentive for buying petrol vehicles.

Diesel is sold at Rs 40.91 a litre in New Delhi, more than Rs 30 a litre cheaper than petrol.
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Old 12th June 2012, 21:11   #734
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by AutoIndian View Post
Could you please copy paste the content of that article over here so that we don't have to wait endlessly to know its details.
Below is the Paste of article . If this Happens , I am sure Auto Industry will be on road with their losses. I fail to Understand what this govt wants . On one hand , they keep on increasing Fuel prices on one pretext or other and other side they are not promoting mass transportation to common man. At the same time, diesel generators are also consuming a substantial amount of diesel ( telecom alone takes home 4300 Cr of subsidized diesel) . they are not taking positive steps. this will increase only negative sentiments IMO .
Quote:
NEW DELHI: The government plans to slap additional levies of Rs 170,000 on small diesel cars and Rs 255,000 on medium and large diesel vehicles to check dieselization of economy due to wide gap between petrol and diesel prices.

"The oil ministry has asked the finance ministry to impose additional excise duty on diesel cars and the matter is under consideration," a government official said.

Oil ministry officials confirmed that its proposal was "favourably" considered. "The money thus raised could be used to meet part under-recoveries (revenue losses of state oil firms in selling fuels below market rates)," an oil ministry official said.

The government expects that the levy would help it in meeting about Rs 10,000 crore annual revenue losses of state oil firms in selling diesel below market rates.

Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum had lost about Rs 81,000 crore revenues in 2011-12 due to a freeze in diesel rates.

Diesel price is frozen in the country for almost a year due to political reasons and it is almost 74% cheaper than petrol, which is a major disincentive for buying petrol vehicles.

Diesel is sold at Rs 40.91 a litre in New Delhi, more than Rs 30 a litre cheaper than petrol.

Last edited by .sushilkumar : 12th June 2012 at 21:12.
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Old 12th June 2012, 21:15   #735
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by AutoIndian View Post
As usual the above mentioned ET link is taking ages to open. Could you please copy paste the content of that article over here so that we don't have to wait endlessly to know its details. Thanking you in advance.
Quote:
Originally Posted by TOI Article
NEW DELHI: The government plans to slap additional levies of Rs 170,000 on small diesel cars and Rs 255,000 on medium and large diesel vehicles to check dieselization of economy due to wide gap between petrol and diesel prices.

"The oil ministry has asked the finance ministry to impose additional excise duty on diesel cars and the matter is under consideration," a government official said.

Oil ministry officials confirmed that its proposal was "favourably" considered. "The money thus raised could be used to meet part under-recoveries (revenue losses of state oil firms in selling fuels below market rates)," an oil ministry official said.

The government expects that the levy would help it in meeting about Rs 10,000 crore annual revenue losses of state oil firms in selling diesel below market rates.

Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum had lost about Rs 81,000 crore revenues in 2011-12 due to a freeze in diesel rates.

Diesel price is frozen in the country for almost a year due to political reasons and it is almost 74% cheaper than petrol, which is a major disincentive for buying petrol vehicles.

Diesel is sold at Rs 40.91 a litre in New Delhi, more than Rs 30 a litre cheaper than petrol.
dieselization of economy ?? What in the world does that mean??

Rajan
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