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Old 19th June 2012, 08:28   #796
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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As long as cheap oil is available, US will conserve its own resources for the day when oil runs out and only a few will have it.
Rightly said. Diesel is not just oil for internal combustion engines, but a geo-political currency. Not to include future supplies, US maintains strategic reserves to handle a few weeks of crisis or supply. The intent of dual pricing is great, but I dont support it not because it is difficult to implement in India, but because it will be exploited by all those with influence or connections! This to me is a more bitter issue than the case of inflation. Inflation has its own levers to manage. Oil and transporation cost is just one.
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Old 19th June 2012, 10:29   #797
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

In today's ET:
Quote:
Industry experts say that out of total state-run refining capacity of 120.066 million tonne (mt), about 40 per cent output (48 mt) is diesel. But annual consumption in the country is over 65 mt, which is met by buys from Essar and RIL at market rates.
Link: PSU oil companies forced to buy diesel from RIL, Essar at market rates - The Economic Times

Given a barrel of crude oil, only diesel cannot be extracted. There are other products too. The question is since demand for petrol is going down, what will these oil companies do with excess petrol?
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Old 19th June 2012, 10:51   #798
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Hello,

Finance Ministry rejects Pretroleum Minister's Proposal to hike passenger Diesel Car prices.

Full Article here: Tata Motors gain over 3% after FM's refusal to tax diesel cars - Sulekha Money

Thus, this means that Oil Companies will continue to bleed & Government will continue to provide subsidy on Diesel, with no clear plan to reduce the subsidy burden.

Seems after 2014 elections the new Govenrment (UPA or NDA) will have a tough time clearing the mess created by popular measures of current government.

We have already seen that two Ratings agengies have downgraded India's investment status.

Thanks,
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Old 19th June 2012, 11:02   #799
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by msdivy View Post
In today's ET:

Link: PSU oil companies forced to buy diesel from RIL, Essar at market rates - The Economic Times

Given a barrel of crude oil, only diesel cannot be extracted. There are other products too. The question is since demand for petrol is going down, what will these oil companies do with excess petrol?
Do you know a funny thing?
When PSU Refineries in India were planned - they were geared to produce more diesel than other fuels. Because of the importance of diesel in our economy.

In the 90s and turn of the millenium, it was realized that our LPG and Petrol capacity is not upto mark, and thus led to a slew of projects which increased the top distillate yield.

Today, again we are back to square one, and now require middle distillate more than the top distillate - because of the idiocy of our government.
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Old 19th June 2012, 17:46   #800
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Post re: Rationalising diesel prices*Update: 50p rise/month announced*

Came across the article.

Auto companies stop production as demand slump continues - The Times of India

Though the title says auto companies shut down production, probably only for petrol versions.

Am wondering what next! Convert all manufacturing units to diesel?!
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Old 19th June 2012, 19:31   #801
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Originally Posted by babu.sundaram
Came across the article.

Auto companies stop production as demand slump continues - The Times of India

Though the title says auto companies shut down production, probably only for petrol versions.

Am wondering what next! Convert all manufacturing units to diesel?!
The petrol car manufacturing is on hold as stocks piled up due to slump in demand. Also the diesel car waiting period is decreased.
When I enquired about swift in Pratham Motors last week, VDi white was available in one and half months max. When I said I am booking Figo, the S.E assured delivery within one month.
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Old 19th June 2012, 19:39   #802
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by msdivy View Post
In today's ET:

Link: PSU oil companies forced to buy diesel from RIL, Essar at market rates - The Economic Times

Given a barrel of crude oil, only diesel cannot be extracted. There are other products too. The question is since demand for petrol is going down, what will these oil companies do with excess petrol?
Depends on the crude. In fact heavy crude; as opposed to light crude (sweet crude); is not only cheaper but contains' a lot more heavy molecules, ideal for diesel, naphtha and ATF.

Sweet crude is preferred in west as it yields more petrol without resorting to cracking (cost !).
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Old 20th June 2012, 12:11   #803
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

@ARoy; Reliance maybe the only refinery which can easily digest heavy (or for that matter almost any) crude. Barmer is designed for high wax content. Dhirubhai spent more to make one of the most flexible refineries in the world. So they are able to use cheaper (and heavier) crude. Thanks to our policies they are exporting 100% of their production.
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Old 20th June 2012, 12:28   #804
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Reading all these post's make me feel that India can never ever be fully reliant on crude for various forms of energy extraction. Assam has too little crude. And we import almost 90%.

Only if our politicians could think they would keep aside money for future generations who might have to face something such as "shortage of crude" in almost all OPEC countries.

Bound to happen in atleast 50-60 years. All the dead dinos will be no more and hopefully hydrogen would be cheaper to produce.
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Old 20th June 2012, 13:38   #805
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Only if our politicians could think they would keep aside money for future generations who might have to face something such as "shortage of crude" in almost all OPEC countries.

Bound to happen in atleast 50-60 years. All the dead dinos will be no more and hopefully hydrogen would be cheaper to produce.
What exactly do you mean 'keep money aside'?
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Old 20th June 2012, 13:46   #806
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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What exactly do you mean 'keep money aside'?
Like any Oil & gas company who goes in for exploration riding on humongous cash reserves, GOI needs to keep aside big monies for "future". If crude dries up India this cash needs to be used for buying another source of energy which effectively replaces crude i.e; Shale gas
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Old 20th June 2012, 13:57   #807
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Like any Oil & gas company who goes in for exploration riding on humongous cash reserves, GOI needs to keep aside big monies for "future". If crude dries up India this cash needs to be used for buying another source of energy which effectively replaces crude i.e; Shale gas
I got that - what I am asking is where should they keep this money for 50-60 years? And since we are already running deficits, where will this extra money come from?
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Old 20th June 2012, 15:11   #808
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Ford5
Assam has too little crude. And we import almost 90%. If crude dries up India this cash needs to be used for buying another source of energy which effectively replaces crude i.e; Shale gas
I think our import is only 70% or so (not 90%) and Assam currently does not contribute much oil - other sites in India contribute. And even today we are buying shale gas from the US. I doubt shale gas can replace crude - it is more of an energy source for power generation etc.
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Old 20th June 2012, 17:19   #809
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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I think our import is only 70% or so (not 90%) and Assam currently does not contribute much oil - other sites in India contribute. And even today we are buying shale gas from the US. I doubt shale gas can replace crude - it is more of an energy source for power generation etc.
I think a big use of oil is for power generation and heating - probably as much or more than transportation. So any resource which can be used for power generation and is available is sufficient quantities will make a huge impact even if it cannot be used for automobiles.
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Old 20th June 2012, 18:49   #810
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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I got that - what I am asking is where should they keep this money for 50-60 years? And since we are already running deficits, where will this extra money come from?
Well they can very well take this money from the same place where they donated $10 Billion to the Euro Zone yesterday.

Money is never a problem. It's the usage of the money that is the problem.
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