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Old 20th June 2012, 19:35   #811
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Ford5 View Post
Well they can very well take this money from the same place where they donated $10 Billion to the Euro Zone yesterday.
How much would that buy - maybe a month's supply of oil? Will that really help in 50-60 years when the world is running out of oil?

Anyway, where should we keep that money for 50-60 years?
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Old 20th June 2012, 20:51   #812
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

@carboy, you are right. But I was thinking only from automobile POV, since that is closer to our heart. Possibly we can have cars running on shale gas, like CNG/LPG cars.

As a kid growing up in Assam, I always wondered why they were burning away (flaring in oil industry lingo) the gas - seemed such a waste of resource. As per Dad, storing it was an issue (back then) and anyway the mission was to get oil. And today we are importing gas after having burnt away such a lot of it at various drill sites in the country.

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Originally Posted by Ford5
Bound to happen in atleast 50-60 years. All the dead dinos will be no more and hopefully hydrogen would be cheaper to produce.
I hope your words (about crude lasting for another 50-60 years) come true. Atleast we and our kids could experience the fun of a petrol/diesel car. The later generations can think up some new source like Hydrogen. But I doubt we will have it for that long - max of 20years is my guess.
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Old 20th June 2012, 21:46   #813
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by supremeBaleno View Post
As a kid growing up in Assam, I always wondered why they were burning away (flaring in oil industry lingo) the gas - seemed such a waste of resource. As per Dad, storing it was an issue (back then) and anyway the mission was to get oil. And today we are importing gas after having burnt away such a lot of it at various drill sites in the country.
From my memory, I think this used to happen at Bombay high also.

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I hope your words (about crude lasting for another 50-60 years) come true.
Not my words - but the person I was replying to.
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Old 21st June 2012, 09:58   #814
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

^^^Yes, flaring happened at all drill sites including the offshore Bombay High.
And yes, I was referring to Ford5's prediction of crude lasting 50-60 years more.
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Old 21st June 2012, 18:15   #815
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by sgiitk View Post
@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.
Actually all that you need to add to a refinery is a "Cracker Unit". Then the heavy cheap (relatively) crude starts yielding dividends.
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Old 21st June 2012, 18:55   #816
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Aroy View Post
Actually all that you need to add to a refinery is a "Cracker Unit". Then the heavy cheap (relatively) crude starts yielding dividends.
Cracker unit doesn't produce high octane petrol. For all purposes, today FCCU is main producer of LPG, and low octane petrol, and some diesel (after hydrotreating).

High octane comes from Isomerization or Catalytic reforming. (along with hydrotreater again)

Main diesel comes directly from Crude oil after fractionation and hydroteating.

Residue cracking produces ultra high sulfur products and they may not even qualify the BS norms.

Capital cost of one unit may easily run into 5000 crores.
Who pays this? We the tax payers.

A very simplified diagram.
The complete complex will have to be hand drawn
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Old 27th June 2012, 10:42   #817
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Hello,

A very good blog by Vireesh Malik in Times of India today: Diary of a Divorced Delhi Male : Veeresh Malik's blog-The Times Of India

It states:
Increase the price of (cleaner) diesel in India - NOW
1. Pacific Countries have successfully managed to switch to cleaner fuels.
2. Diesel we get in India is of low quality as conpared to Western Countries, which leads to more polution & health hazards.

Thanks,
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Old 28th June 2012, 13:39   #818
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

This just in Fuel pricing reforms expected with Manmohan Singh taking additional charge of Finance Ministry - The Economic Times but again the final decision as usual will be a resultant of the net political equation.

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According to officials fuel pricing reforms are expected after mid July post Presidential poll, which would include a hike in diesel rates by atleast Rs 3 per litre and limiting highly subsidized cooking gas cylinders to four refills per household every year.
Rs 3 would be a tough ask, only time will tell. It will probably be nullified to quite an extent by the states foregoing some of the taxes they collect on diesel to collect brownie points from their vote banks. I wonder how they will manage the four cylinder limitation. What amazes me more is the government's stout and stubborn refusal on cracking down on rampant corruption where domestic LPG is brazenly used for commercial purposes or petroleum products being siphoned off by the oil mafia in broad daylight. Rest assured all the middlemen working in the perishable goods and commodities market specially foodgrains and veggies will ensure that any price increase improves their own profits by 3 to 4 times hitting the common man hard. Its a misnomer that increase in diesel prices don't affect inflation. If things had been conducted with honesty here it wouldn't have perhaps but this is India so expect the impact 3 to 4 times the actual cause. Not to forget the highly potential failure of monsoons this year .

Interesting to see that yesterday's Rs 4 reduction for petrol is now Rs 2.5. Enough caveats are being added to maybe make it Rs 0 by the end of the month. Either way we will know tomorrow.
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It is expected that state-run oil marketing companies, which skipped a price revision in mid June, will also reduce petrol rates by about Rs 2.50 per litre from next month. "There are gains in terms of crude oil, but it is largely nullified due to rupee depreciation. Exact quantum will be known only on June 30 th as average oil price and exchange rates will vary due to volatilities in the rates of the two crucial items," chairman of an oil firm said requesting anonymity.
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Old 13th September 2012, 20:25   #819
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Heads will roll at RBI now. This Rs. 5 increase will take inflation out of control. Food and Essential commodity prices will soar up like hell. Most likely you can expect a roll back of about 2 ~ 3 bucks in the next two days.
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Old 13th September 2012, 20:38   #820
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Originally Posted by Warwithwheels
Heads will roll at RBI now. This Rs. 5 increase will take inflation out of control. Food and Essential commodity prices will soar up like hell. Most likely you can expect a roll back of about 2 ~ 3 bucks in the next two days.
Sorry, but that is completely wrong. Diesel has a negligible impact on food prices. And this is just a 10% hike, far less than general inflation or the depreciation of the INR since the last hike. Roll backs off course are still possible
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Old 13th September 2012, 21:23   #821
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Originally Posted by Hayek

Sorry, but that is completely wrong. Diesel has a negligible impact on food prices
Got to disagree with that. At least in a state like Kerala which depends almost entirely on food brought from outside, diesel price hike does drive the prices upward. And this is not in proportion with the diesel price hike due to profiteering by middlemen and retailers. Hotels too hike their rates (even room rents) citing the diesel price hike, again arbitrarily.
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Old 13th September 2012, 21:34   #822
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Why? Why is this government further burdening middle class and poor people?
This 5 bucks increase in cost of diesel is going to have a spiralling effect on each and every thing. I just changed my garage into ALL DIESEL cars and this increase is going to hurt.

But I feel that this 5 bucks increase will be partially rolled back in a week's time, after opposition parties call for bandh, lottery owners association call for an indefinite strike and a lot of drama.

EDIT: TMC, CPM have already registered their protest.

OT: Excuse Duty on Petrol cut by Rs. 5.30/litre. Hence no increase in Petrol price.

Last edited by MAS : 13th September 2012 at 21:48.
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Old 13th September 2012, 21:34   #823
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Quote:
Originally Posted by one-77

Got to disagree with that. At least in a state like Kerala which depends almost entirely on food brought from outside, diesel price hike does drive the prices upward. And this is not in proportion with the diesel price hike due to profiteering by middlemen and retailers. Hotels too hike their rates (even room rents) citing the diesel price hike, again arbitrarily.
Unfortunately, too many of us believe socialist bunk about profiteering middle men. In fact, the Indian middle man operates a very low cost and highly competitive business model, which generates high Returns on Capital Employed (ROCE) only because the middle man fails to accurately cost inputs such as his own time and property owned by him which was purchased at historical costs, and because he evades our high indirect taxes (which are much higher than the intrinsic profit margins in his business).

The myth that diesel prices have a material impact on commodity prices has been amply debunked by me on this thread (unfortunately, the iPad app does not let me find and link to that old post). Even if people use the diesel price hike as an excuse to boost margins, the intensely competitive nature of the Indian wholesale trade will whittle those margins down very quickly. Inflation in every country in the world is a monetary phenomenon. And the diesel price subsidy and the other spend thrift policies of our current government are the major reason for the rise in inflation in India from about 5% to about 10%. Elimination of all fuel subsidies will actually bring down overall inflation in India (after a one time blip).
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Old 13th September 2012, 21:39   #824
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Well diesel price increase will increase inflation is what everyone thinks ,and ya its quite logical to say that.

But think it the other way.This hike will decrease the fiscal deficit which is one big worry for India.A higher fiscal deficit also results to inflation - this cant be explained easily and may not be always true. Higher fiscal deficit means having more borrowed money ,this means better cash flow and hence results to inflation.
So a diesel price hike is a move to curb inflation.
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Old 13th September 2012, 21:41   #825
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^ I agree that theoretically what you say is true. But more often than not, things don't work out the way they're laid out in the textbooks. My knowledge of economics is very limited. What I'm stating is only what I've been observing over the last few years.
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