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Old 27th December 2012, 15:48   #976
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I being a Diesel car owner, is all for removing subsidy from Diesel.
Diesel being superior fuel to Petrol is still a better alternative after de-controlling it.

My only grouse is, why on earth is govt charge such heavy taxes on fuels?
2nd I fail to see the point of a large difference between Diesel and Petrol variants of same car.

Will govt really decontrol fuel or dole out carrots during parliamentary elections and assembly elections?

As it appears to me biggest oil mafia in country is Indian govt itself. It decontrols petrol prices at its own fancy and whim. It holds back petrol rise in case of a nearby election to garner votes.
Once that is done, they increase the price. Oil companies are just tools in hands of a morally corrupt govt.

Decontrol Diesel, decontrol LPG and kerosene too. I can afford them at decontrolled prices, all I have to do is to avoid eating out and perhaps spend thrifty.

But looking at governance, I bet they will milk us more instead of solving problem from the root.
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Old 27th December 2012, 16:11   #977
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by acroback View Post
Decontrol Diesel, decontrol LPG and kerosene too. I can afford them at decontrolled prices, all I have to do is to avoid eating out and perhaps spend thrifty. But looking at governance, I bet they will milk us more instead of solving problem from the root.
Hello Acroback,

Appreciate your views on decontrolling Diesel prices.

But believe me no political party or political person will dares to talk of decontrolling Diesel prices. This is because Diesel has always been potrayed as poor man's fuel. Add to this the fact that general elections are approaching in 2014, they will not try to irk the (so-called) common man any further.

Probably the law makers fail to understand that most of luxury high end Cars run on Diesel & all the high end Malls in tier 2 cities & towns run on subsidized Diesel generators. Now these people do not need subsidized fuel & they can very well pay the deregulated price of Diesel. But it seems that this logic is not understood by our economists.

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Old 27th December 2012, 17:10   #978
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Rs 10/litre hike in diesel, kerosene if Oil Ministry proposal is accepted:

Full Story here: http://economictimes.indiatimes.com/...w/17781256.cms

Friends, do you believe this? I have my doubts - either in the press report or in Oil Ministry's proposal.

Oil Ministry's proposal is to increase Diesel Prices by Re.1 every month for next 10 months, so that market price of Diesel matches the cost & oil companies will stop making loss of Rs. 9.23 per liter of Diesel that they are currently incurring. There is a similar proposal to increase LPG prices, but over a 2 year period.

Understand that the above proposal is subject to cabinet approval, which I am sure be object with all the might by opposition & regional political parties.

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Old 27th December 2012, 17:50   #979
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I am sure this Govt can't take such a step to increase Diesel price every month by Rs 1/-. I have seen enough debate on diesel pricing and all the time those who are in favour of decontrolling, always talk about fuel guzzling SUVs and Richs misusing the benefit, no one talks about mid-size or hatch backs statrting at as low as 4.5L and running on diesel, aren't they common man?

If the price has to be deregulated, the tax part should be lowered drasticaly if not abolished.

Those who uses their car more than 15K km per year, diesel will always be the prefered fuel type even if the price of Diesel & Petrol are made same, due to higher milage of Diesel vehicle.
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Old 27th December 2012, 21:04   #980
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by asdon View Post
no one talks about mid-size or hatch backs statrting at as low as 4.5L and running on diesel, aren't they common man?
They are not the common man when you consider majority of the people still use two wheelers that needs petrol .It pinches them more considering not only is petrol more expensive ,but when they are in a traffic signal they are going to see only one person in a diesel car with is AC turned On and they must be thinking "While he is staying cool inside ,i am paying for his fuel",i bet every other petrol car owner thinks the same.

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Originally Posted by asdon View Post
If the price has to be deregulated, the tax part should be lowered drasticaly if not abolished.
Prices of petrol were deregulated a long time back, but its excise duty is still more at Rs9.48 vs diesel Rs3.56 and VAT on petrol is again higher .Infact if the excise/tax on both are the same or even abolished, then diesel will be more expensive.

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Originally Posted by asdon View Post
Those who uses their car more than 15K km per year, diesel will always be the prefered fuel type even if the price of Diesel & Petrol are made same, due to higher milage of Diesel vehicle.
True,but those people are not the common man.
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Old 28th December 2012, 11:27   #981
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I think we are barking up the wrong tree. The Rs.5 increase added all of 0.1% to inflation. So Re.1 per month will add zilch (0.02%!).

Remember for every Re they pay as subsidy we are probably shelling out three as taxes.

Also, Rs.10 over two years is on the cards for the holy of holies, namely K-oil!
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Old 28th December 2012, 11:31   #982
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Its high time they did that since gujrat elections are also over now. so more they delay more issues during 2014 elections.

Having said that, i feel that they are surely making profits on petrol already. They are talking about losses on diesel but what about the profits made on petrol ?

I hear cries from my diesel car owner friends, why increase prices of diesel ? because it is the right thing to do.

But dont make it one sided. when you increase the prices, reduce the tax percentage as well !! that is more important.

Last edited by rajshenoy : 28th December 2012 at 11:32.
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Old 28th December 2012, 11:37   #983
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by sgiitk View Post
I think we are barking up the wrong tree. The Rs.5 increase added all of 0.1% to inflation. So Re.1 per month will add zilch (0.02%!).

Remember for every Re they pay as subsidy we are probably shelling out three as taxes.

Also, Rs.10 over two years is on the cards for the holy of holies, namely K-oil!
You hit the nail on the head!

The government has realized that raising diesel prices has only a temporary effect on inflation but a long term positive impact on the fiscal deficit of our country which in the red ever since Indian economy was downgraded by international credit rating agencies.

Some of this is explained here:
http://www.dnaindia.com/money/report...-pmeac_1743554
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Old 28th December 2012, 12:44   #984
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

What commodities does the inflation number take into consideration? I see a lot of day to day activities (plus construction etc) going up with the prices.
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Old 28th December 2012, 15:31   #985
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by sgiitk View Post
I think we are barking up the wrong tree. The Rs.5 increase added all of 0.1% to inflation. So Re.1 per month will add zilch (0.02%!).

Remember for every Re they pay as subsidy we are probably shelling out three as taxes.

Also, Rs.10 over two years is on the cards for the holy of holies, namely K-oil!
And for every three rupees that we pay as taxes, only three paise is spent on the public welfare. Which brings us to a crossroads - out of all the tax money collected, who is in charge of checking how correctly it is being spent?
When is such an audit published for public scrutiny? Once this is done, we can think about lodging a PIL against the "executive arm" of the government.
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Old 28th December 2012, 15:59   #986
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by aim120 View Post

True,but those people are not the common man.
Can't agree with you on this, as I have been a common man for long and my yearly avg is 25K+ KMs,

And the 2 wheeler guys paying for Diesel car owners' fuel is not completely true, the Diesel car guy might be paying more tax than the 2 wheeler guy, and what is the car owner starts thinking that he is paying for 2 wheelers Petrol subsidy and facing traffic jam for the same?

My point is, reduce the tax of both fuels and then leave them to market price, once decontrolled(fully) the price should change everyday not at Govt's will.
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Old 28th December 2012, 16:42   #987
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by bharatbs View Post
You hit the nail on the head!

The government has realized that raising diesel prices has only a temporary effect on inflation but a long term positive impact on the fiscal deficit of our country which in the red ever since Indian economy was downgraded by international credit rating agencies.
Small correction here - India's sovereign rating wasn't downgraded by the credit rating agencies. Our credit outlook was cut. It's a warning that if corrective action isn't taken, the sovereign rating could be cut (to junk from one grade above at present.)

Quote:
Originally Posted by srishiva View Post
What commodities does the inflation number take into consideration? I see a lot of day to day activities (plus construction etc) going up with the prices.
http://www.indiainfoline.com/Markets...WPI/5177094461

Quote:
Originally Posted by asdon View Post
Can't agree with you on this, as I have been a common man for long and my yearly avg is 25K+ KMs,

And the 2 wheeler guys paying for Diesel car owners' fuel is not completely true, the Diesel car guy might be paying more tax than the 2 wheeler guy, and what is the car owner starts thinking that he is paying for 2 wheelers Petrol subsidy and facing traffic jam for the same?

My point is, reduce the tax of both fuels and then leave them to market price, once decontrolled(fully) the price should change everyday not at Govt's will.
Just to point out, taxes on diesel are lower than petrol in India.

Separately, my solution is to use more of the only fuel we produce significant amounts of domestically - natural gas.
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Old 28th December 2012, 17:14   #988
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Quote:
Originally Posted by sgiitk View Post
I think we are barking up the wrong tree. The Rs.5 increase added all of 0.1% to inflation. So Re.1 per month will add zilch (0.02%!).

Remember for every Re they pay as subsidy we are probably shelling out three as taxes.

Also, Rs.10 over two years is on the cards for the holy of holies, namely K-oil!
Dear Sir,
with due respects to your opinion and others' too, I still beg to differ. We are not barking towards the wrong tree, it is Government that has to refine now. There may be umpteen statistics to show that removal of diesel subsidy doesn't influence rise in inflation, especially now, because already rate of inflation has risen tremendously high.

Even the DNA article doesn't give any clear picture. It simply states in short as quoted "Immediately, it can produce raise in the price index but over the year I think over the medium term it is the best thing to do".

So who knows what shall happen over medium term? Lies, damned lies and statistics: We all are feeling the pinch of inflation yet we want to assure ourselves, keep telling ourselves that what Govt does is good? In that case why didn't the Govt remove subsidy before, if it was "best thing to do on medium term"?

I beg to disagree with the point over subsidy. You say we pay more taxes for the subsidy that they dole out. But in fact, removal of subsidy doesn't in return mean cut in taxes. Govt is not cutting down taxes on petroleum products. Govt has huge expenditure which it doesn't want to control, but rather increase its "income" and one such means is removal of subsidy. I see no relief or benefit to neither common man nor the middle class.

There is definitely a large influence of Govt's action on inflation. With no proper accountability of tax payer's money, Govt is increasing expenditure year after year (vote bank politics & free lunches). Unless Govt expenditure is reduced, our tax money will not return back to benefit us.

Last edited by cs_rajesh : 28th December 2012 at 17:16.
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Old 28th December 2012, 18:33   #989
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Reducing the useless government expenditure and reducing the overall taxes mess on the is the only way to control the inflationary pressure. Decontrolling diesel is the only way forward to for this country.
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Old 4th January 2013, 19:57   #990
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Predictable hike in Diesel prices mooted. If this happens we can expect the Diesel prices to touch the 100 rupee mark in 4 years time!

http://economictimes.indiatimes.com/...w/17879306.cms
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