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Old 23rd June 2011, 21:17   #76
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I accept that the Deisel Pricing has to be regularised no second thought. But I also expect some releif on the roadtax as suggested by many.

dont like to kick off a arguement - but really do we get what we deserve. Do we get good roads to drive our cars? Even if we get we need to shell out good amount of money to use them see the number of toll booths from Hyderabad to Bangalore.
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Old 23rd June 2011, 21:32   #77
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by PuntoMania View Post
Unsubsidised diesel costs something like Rs 57 per litre, compared to unsubsidised petrol which costs around Rs 71 per litre (in Pune). A diesel still gives anywhere between 20 to a whopping 50% more fuel efficiency over petrol. So, which one is more economy friendly again ?
It's a factor of the respective tax rates. Forget subsidies the guy who fills fuel in a moped pays more taxes than the guy who fills diesel for his ten lakh SUV. In which world is it fair?
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Old 23rd June 2011, 22:40   #78
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by RS_DEL View Post
You are asking the babu class to get off the gravy train! You think it will ever happen?

As anyone who has seen the way India is run, even from outside, will tell you the netas are not half as big as a problem as the babus. Think of the various avenues of enrichment that are available to them when the subsidies are supposed to be dispensed to the intended beneficiaries. You think they are ever going to give up these perquisites of office?

Further with reference to the merits and demerits of subsidies. Like it or not, they are a part of the policy of all major economies including those in the OECD block. There is no way they are going to be given up by our country.

Since in all likelihood [1] subsidies are not going away and [2] diesel vehicles are going to sell in increasing numbers due to the current fuel pricing scenario, whats the solution? Curb diesel vehicle sales for the personal transport segment. The proclaimed benefits shall most likely be [1] diesel subsidy for agriculture and transport sector is protected and [2] unjust enrichment of auto manfacturers selling disel vehicles is curbed and money collected to fill the coffers of the state.
I doubt there is any OECD country where there is so much disparity between the price of diesel and petrol which has created this market situation. We are not talking about overall subsidies here, but subsidies in diesel only. I feel this one time tax will not achieve the desired end result at all i.e. curbing vehicle sales because its extremely difficult to implement now that there already are millions of diesels on the road. Why is it so hard to imagine a country with no diesel subsidy ? It is really the most viable solution to this problem. Everyone involved gets a fair deal.

In any case, a significant percentage of the diesel subsidy (30-40% ??) is being diverted to private vehicles and telecom companies. So out of every Rs 100 subsidy, Rs 30 may be going towards welfare of individuals and companies that dont need it. Why not instead spend this whole Rs 100 in anti inflation measures ? Basic economics suggests this same Rs 100 that is used for diesel subsidy, when diverted to other sectors in different ways should do the job of keeping food and other essential commodities low.

I know this is quite improbable (as you say), but I am only talking about the ideal solution for the country in the long run. Not the most likely one. There is a difference. And I firmly believe that diesel cars, even without diesel subsidies will still be "better for the macro economy" than petrol cars will ever be, mainly due to its huge advantages in fuel efficiency. There is no doubt in my mind that in an ideal world, with petrol and diesel engines at this stage of development as they are now, a petrol car does more damage to the environment as well as the economic well being of an oil importing country than a diesel car.

Quote:
Originally Posted by pypkmsrikanth View Post
It's a factor of the respective tax rates. Forget subsidies the guy who fills fuel in a moped pays more taxes than the guy who fills diesel for his ten lakh SUV. In which world is it fair?
Nobody says its fair, you're going off a tangent and talking emotionally. Please quote where exactly I or anyone else says differential pricing or taxation is fair at all.

Last edited by PuntoMania : 23rd June 2011 at 22:41.
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Old 23rd June 2011, 23:09   #79
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by PuntoMania View Post

In any case, a significant percentage of the diesel subsidy (30-40% ??) is being diverted to private vehicles and telecom companies. So out of every Rs 100 subsidy, Rs 30 may be going towards welfare of individuals and companies that dont need it. Why not instead spend this whole Rs 100 in anti inflation measures ? Basic economics suggests this same Rs 100 that is used for diesel subsidy, when diverted to other sectors in different ways should do the job of keeping food and other essential commodities low.

I know this is quite improbable (as you say), but I am only talking about the ideal solution for the country in the long run. Not the most likely one. There is a difference. And I firmly believe that diesel cars, even without diesel subsidies will still be "better for the .
Utopia my friend does not exist as we all know. Second the power elite always works towards it's own best interests and not that of the country. It takes a cataclysmic event/set of circumstances for any society to take a turn that is objectively in it's best interest e.g. India going bankrupt in the late 80s' and early 90s'.

So while your argument may be intellectually sound and logically desirable, it most certainly is not going to get translated into reality. The reality will remain as skewed as it is, simply because it serves the objectives of those in control.
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Old 23rd June 2011, 23:58   #80
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I second PuntoMania's views on one time tax etc. its not going to help in the long run. We like it or not, unsubsidized diesel is the way to go.

Some of the earlier posts by petrol car owners (going by their signatures) are not in right spirit. It looks like they want to get back at fellow diesel car owners by punishing them with this special tax.

Petrol and diesel owners, both had an option to buy a diesel/petrol car. None of us were forced to buy a Petrol/Diesel car. It must have been a well informed decision. In fact most of the "smart" car owners would have used the "petrol vs diesel" spreadsheet for sure. They were aware of the fluctuating nature of oil prices, govt subsidies for diesel etc. They made a decision considering all the factors like budget, average, maintenance costs, resale value, NVH levels etc and zeroed in on the best possible VFM product. I think both the owners have enjoyed their possessions in their own ways and have compromised on something or the other.

For diesel car owners, the compromise would be
1. Huge premium paid upfront
2. High EMI, Insurance premium
3. High maintenance costs
4. High NVH levels
5. Longer waiting period
6. Sacrifice of LPG/CNG conversion option (in case unsubsidized diesel manages to beat petrol prices in future)

For petrol car owners, it would be
1. High running cost
2. Less TORQUE??
Can't think of anything else

Lets consider an OT example. EET - Earn Exempt Tax

We wouldn't be happy if the government decides to tax all our past "tax-free on maturity" investments. would we?

Just like the diesel subsidy, EET is also one of the important reforms. But that should be applicable to all the investments made after the bill is passed or some agreed date in future. When I invested money in PPF account 12 years back, EET was not part of the terms & conditions of the agreement then. In fact one of the major reasons for choosing PPF over other investment avenues was the tax exempt nature of it. So in my opinion it would be unfair on govt's part to apply EET to the investments made in the past. In the same spirit, when I bought a diesel car, I had factored in the possibility of unsubsidized diesel prices in the near future. So I am game for it. But taxing me for buying a diesel car? huh! give me a break.

Consider this. After a couple of years, based on some scientific research paper, govt decides to charge Petrol car owners, a tax equivalent to 50% of original vehicle cost, for damaging the environment, would you accept it? So the topic is beyond who owns what. Its about fuel subsidy policy.

In my view unsubsidized diesel prices will help create a level playing field rather than charging a one time tax to diesel car owners and assuring them diesel @ subsidized prices forever.

Lets see if the govt decides to bite the bullet. In the meantime lets enjoy our cars. Peace.

Disclaimer: I own MJD Punto. In fact I am planning to upgrade to a sedan and already thinking about a couple of Petrol ones (T-Jet and a car whose price was reduced by 44k recently.) :-)

Quote:
Originally Posted by pypkmsrikanth View Post
It's a factor of the respective tax rates. Forget subsidies the guy who fills fuel in a moped pays more taxes than the guy who fills diesel for his ten lakh SUV. In which world is it fair?
And in which world is it fair that the guy using a moped doesn't have to pay a single rupee toll for using the same 6 lane road for which the car owners have to pay a hefty toll?

So lets not get into all that.

Last edited by Rock 'n' rollz : 24th June 2011 at 00:03.
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Old 24th June 2011, 05:25   #81
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by PuntoMania View Post

Nobody says its fair, you're going off a tangent and talking emotionally. Please quote where exactly I or anyone else says differential pricing or taxation is fair at all.
Firstly I never meant you were calling it unfair sorry if it appeared so.


With regard to the context of talking emotionally or off tangent I suppose one can never talk of subsidies & taxes separately they both go hand in hand. Petrol goes through a higher tax structure because it is the fuel used by the rich, while diesel is taxed less because it is used by the farming & transport community. You would see the paradox of this statement in the example which I quoted.

The huge disparity which exists between the two prices is not just a function of the subsidies but also the prevailing tax rates as well. In the current context of things I would certainly feel aggrieved about me paying through my noses in the form of taxes for the fuel I use so that the guys in the Mercs' / BMWs' / Innovas' etc fill happily at some 40% lesser prices than me, substitute the "I" with the guy running in his moped you would realize what I am trying to convey.


Quote:
Originally Posted by Rock 'n' rollz View Post

And in which world is it fair that the guy using a moped doesn't have to pay a single rupee toll for using the same 6 lane road for which the car owners have to pay a hefty toll?

So lets not get into all that.
Classic case of comparing apples to oranges. The truck guy will always turn around and tell, I go at 40 kmph per hour while the car guy goes at 120 kmph why is he not being charged 3 times my toll by that logic. Don't mix up tax rates for fuel and road tolls.

In the longterm interests of the country I certainly feel there has to be dual pricing for diesel. What may be the government could do is get the diesel cars to pay an annual fee something similar to the license fee sort of thing which used to prevail for televisions / radios a few decades back. This way both the old and the new car users can pay their share of market prices for diesel. At this a fair percentage of telecom companies / IT companies don't pay commercial tariff, instead run on captive DG options using subsidized fuel which needs to be addressed as well or we will never think of being thrifty with our fuels.
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Old 24th June 2011, 07:50   #82
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Why cant any one ask for the reduction in petrol prices instead of arguing for increase in diesel price?

If diesel is priced lower than petrol, the powers-that-be have enough logic to continue with that sort of pricing. If at all diesel is being deliberately priced lower, it is definitely not keeping in mind the Mercs and BMWs.

It is a fact that much more diesel is consumed than petrol and that the percentage of consumption of diesel by cars is very less compared to the total consumption of diesel.

Also, while diesel prices may be "rationalized", ie., increased, will the sale of diesel cars decrease?

Is petrol costlier than diesel by virtue of pricing alone?

If diesel cars be banned, will we need bigger petrol engines for generating torque comparable to diesel engines of corresponding segment? Will
that mean more consumption of petrol which results in more pollution?

Why is diesel subsidized?

At the behest of Tata Motors, as some of us would like to believe?

Last edited by simplyself : 24th June 2011 at 07:59.
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Old 24th June 2011, 07:57   #83
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Talking re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by pypkmsrikanth View Post
It's a factor of the respective tax rates. Forget subsidies the guy who fills fuel in a moped pays more taxes than the guy who fills diesel for his ten lakh SUV. In which world is it fair?
Two-Wheeler makers should develop diesel engined mopeds

Should toll ways charge depending upon the speed of the vehicle?

Is road more susceptible to speed or load?

Is lorry a personal vehicle or commercial one?

Last edited by simplyself : 24th June 2011 at 08:00.
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Old 24th June 2011, 08:47   #84
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Has somebody looked at the break up of petrol price? crude cost + refining cost + tax for Govt + Dealer's Cut + transportation charges etc??? I dont know the figures, but it sure will be helpful to know those.
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Old 24th June 2011, 08:58   #85
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

There is a price revision on the cards today:
Diesel, LPG may get costlier from Saturday - CNBC-TV18 -

Watched it on the news just now.

Hoping against hope:
Diesel prices remain same. [Tax cuts but price hike]
Petrol prices come down. [Tax cuts no hike]
LPG prices to remain same. [I got to take bath now]
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Old 24th June 2011, 09:16   #86
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

It is reported in some sections that the quantum of diesel subsidy is Rs.1.49 /lt irrespective of pump price of diesel. If that is the case, other issues like Excise, Central and Sales Taxes can be left untouched and totally remove the subsidy. That wouldnt make a hell of difference. (29.06.2010 moneycontrol.com)

A more recent news (18.02.2011, TOI) is the petrol under recovery is around Rs.2/litre and for diesel that is Rs.9.55 /litre. The OMCs get around Rs.30-35 per litre on sale of petrol and the rest is taxes.

Today's reports suggest the Government is considering an increase of about Rs.3/litre on diesel, Rs.1.50/lt on petrol and Rs.25/cylinder on domestic LPG.

Last edited by simplyself : 24th June 2011 at 09:26.
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Old 24th June 2011, 09:53   #87
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Also, a Re.1 per month rise in diesel (without and EGoM) may be on the cards. This meeting preponed and in a hurry shows that the FM may be worried about ebng taken to task by the WB/IMF!

The Kirit Parikh committee had already recommended a Rs.80,000 per unit tax on all diesel vehicles/cars, along with market pricing. This is recognising that the differential tax structure may not be possible to do away with.
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Old 24th June 2011, 10:35   #88
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

For the benefit of those who are wondering what is the break up of the costs. Here is one which Deccan Herald had carried sometime back.
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Old 24th June 2011, 11:32   #89
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Wow 49.01% tax.
We really are a country of idiots.
I guess the tax for new cars is also about the same. or perhaps more.
Anyway, about dual pricing for diesel, if I understand right, private individuals who drive for personal use should pay more but commercial enterprises using vehicles for money making should pay less.
Hypothetically this is like providing free laptops for CEOs of major industries and making students pay more for laptops (aka free laptop students scheme).
Am beginning to think that this forum is full of fleet owners.
Agreed that raising cost of diesel will cause an increase in all prices from bus tickets to tomatoes, but we are not in a communist country. State sponsorship does not exist. What does, is a form of cheating by the govt. to earn votes. Free power, freebies, free housing, free cars, subsidized fuel,etc. are not truly possible in a country where one has rights and duties.

Last edited by wildsdi5530 : 24th June 2011 at 11:34. Reason: skipped words and punctuation
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Old 24th June 2011, 12:08   #90
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Why can't we just accept the way things are in India. Nothing is going to change. Period.

Do not expect even an "iota" of commonsense from the Babus and Netas. Their only purpose in life is to accumulate as much of cash as possible so that their coming 7 generations live comfortably. Nation building goes to dogs.

Rationalizing Diesel price will not happen in near future. Or will be very nominal. That's why I bought Diesel car inspite of its NVH. Learn to trust the dishonesty and incompetence of our politicians/babus. This is one front where they will never let you down.

So go ahead and buy a diesel car for yourself. Get real. Get going.
Or else keep debating.
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