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Old 24th June 2011, 12:20   #91
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by PuntoMania View Post
I know you think de-regulation will cause inflation to spiral out of control, but then the money used for subsidy can be used in a lot of other purposes which will reduce the dependence on diesel in the first place i.e. address the root cause (please see my post on page 4)
I agree but it has to be done in steps. Cannot be done in one go. Which is why I favor additional taxation for diesel cars (which reduces to nil as subsidies are removed). I am not anti-diesel or seeking revenge from diesel owners.

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Originally Posted by PuntoMania View Post
Pollution has many economic costs one of them is health bills (It is estimated that in California alone $ 25 Billion a year is spent on health problems that are caused by pollution). I dont want to go into detail on this, just do a simple google search you'll get your answers.


Not a valid argument as the diesel buyer does not have control over the quality - and neither does the petrol buyer for that matter. We really shouldnt go into stuff like Sulphur content or for that matter petrol/diesel adulteration as that is something none of us can determine here.
You list economic cost of pollution then say that the 2nd part is not a valid argument. I am not talking about adulteration. I am talking about the purest form of diesel in India as it comes out from a refinery. That diesel has a high sulphur content which is what comes out as exhaust from diesel vehicles. My argument only becomes null and void if diesel fuel is of high quality (with extremely low sulphur content). What happens after adulteration is not being discussed here.

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The fact that he / she did shell out even more money for a diesel than before will perhaps make him use the car even more, which once again, let me remind you is the not the objective of these measures in the first place : The objective of any such measure is to reduce the consumption of diesel and still ensure that the automotive sector is not affected adversely.
I will try to explain with an example. With mobile tariffs dropping to 1p/sec, how many people end up talking for hours at length? Beyond a limit, cheaper tariffs just don't promote people to talk more.

Point is if cost is high, people wouldn't be lining up to buy a diesel vehicle as much as they are now. Only those who's normal running is high will buy diesel vehicles - as it used to be before.

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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 ?
Your argument is on thin ice. I don't know which industry you are in but in software development there's a rule - concentrate on optimizing that part of the code which executes 90% of the time as that's what will improve performance. Converting the cars, if I drive my 50 year old petrol car for less than 5000kms/yr & someone with a modern diesel drives 50000kms/yr, you probably should be looking at diesel car to reduce pollution and your fuel import bill.

Secondly, you haven't considered the fact that all two wheelers run on petrol which probably give more kms/litre even when compared to the most fuel efficient diesel car.

I am not sure about this - but aren't both petrol & diesel a necessary by product of refining crude oil? If not then you are probably right. If yes, what do we do of the petrol produced?


I agree with rest of your post which I have not quoted here.



To many others, who think petrol car owners are seeking revenge - think again! What we want is good use of our taxes. If our taxes go to fund the fuel/electricity/gas/ any other thing, all tax payers should question such policies rather than resorting to petty comments like 'petrol car owners are out to get us'.
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Old 24th June 2011, 16:24   #92
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by asr245 View Post
To many others, who think petrol car owners are seeking revenge - think again! What we want is good use of our taxes. If our taxes go to fund the fuel/electricity/gas/ any other thing, all tax payers should question such polices rather than resorting to petty comments like 'petrol car owners are out to get us'.
First things first - I own a diesel and I definitely do not think that petrol car owners are seeking revenge here.

Now about the 'good use of our taxes' bit. Honestly if that is what you want then you are barking up the wrong tree. Right now the biggest use of our taxes is on interest payments and the the second biggest is in filling up the coffers of netas/babus/contractors (which is the primary reason for the first biggest use anyway) on account of the so called social sector schemes like NREGA, NHM, SSA etc. Fuel subsidy (if at all you can call it a subsidy) will come a long way down the tax revenue expenditure list.

Regarding subsidies in particular - Like it or not we end up using a lot of subsidies not meant for us or at least not needed by us. Reason being - the choice doesn't exist. LPG subsidy is a prime example - it should be for poor households only but people like us who earn six figure salaries a month buy LPG cylinders which are subsidized to the extent of 50%. The atta that you buy (or the one used in restaurants/dhabas/office cafeteria) is largely made from grains pilfered from the PDS (subsidized to the extend of 80%). The universities that we went to are subsidized to the extent of 90%. Can't we pay up full cost of tuition? We obviously can.

Bottom line at least for me is this - Everybody responds to the set of incentives given to them. If I travel a lot and my cost of travel goes down by my diesel usage then I will for sure go out and buy a diesel vehicle. Should that make me feel guilty of consuming it? The answer has to be a big NO. I pay my taxes and cast my vote - beyond that things really are beyond my control. I want the government to do a lot of things right and if better use of my taxes is what I want then there are a lot of other things that I would want the government to do before they come to what they call 'fuel subsidy'.
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Old 24th June 2011, 17:20   #93
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Cesc View Post
Now about the 'good use of our taxes' bit. Honestly if that is what you want then you are barking up the wrong tree. Right now the biggest use of our taxes is on interest payments and the the second biggest is in filling up the coffers of netas/babus/contractors (which is the primary reason for the first biggest use anyway) on account of the so called social sector schemes like NREGA, NHM, SSA etc. Fuel subsidy (if at all you can call it a subsidy) will come a long way down the tax revenue expenditure list.
I guess this is the only tree worth barking at. Interest payments and the coffer filling is something that cannot be resolved by evolution; there has to be a revolution for that! Fuel subsidy is the most visible area, thanks to the regular increase in petrol prices and the priceless comments of our hon. minister Mr. Ramesh!

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Originally Posted by Cesc View Post
Bottom line at least for me is this - Everybody responds to the set of incentives given to them. If I travel a lot and my cost of travel goes down by my diesel usage then I will for sure go out and buy a diesel vehicle. Should that make me feel guilty of consuming it? The answer has to be a big NO. I pay my taxes and cast my vote - beyond that things really are beyond my control. I want the government to do a lot of things right and if better use of my taxes is what I want then there are a lot of other things that I would want the government to do before they come to what they call 'fuel subsidy'.
I dont think the thread is attempting to incite guilt in diesel users (at least not my intention!). The problem is the disparity that is felt while tanking up, but I guess even that will be out of the door pretty soon as the latest demand from the oil companies is an increase of 13 rs per litre (or is it 15?). This is bound to hit all commodities and push inflation up further. By the way, the 'vultures' have taken their shot at it:
http://www.team-bhp.com/forum/indian...ars-go-up.html (Insurance on diesel cars to go up)
Now if there is a diesel hike too, that would be a double blow.

PS: I am not gloating about it, it affects me too as a commodity user.

PPS: hopefully someone higher up will have the sense to steer the economy back to rail based freight & mass transport. Perhaps, we should learn from China how to build high speed mass transit trains.

Last edited by selfdrive : 24th June 2011 at 17:21.
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Old 24th June 2011, 17:53   #94
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

first and foremost I find it surprising that people still refer to diesel engines as more polluting , I am reposting SIAM's paper on the same for some quick reality check
http://www.siamonline.in/SIAM-Diesel-1st-Feb-2011.pdf Low sulphur diesel is as much a reality as unleaded petrol so that arguement does not hold good any more. Europe is one of the largest adopters of diesel as a fuel tech , the continent's track record of being at the forefront of adopting environment friendly fuel techs is unquestionable. Diesel is proven to be beyond doubt a cleaner burning fuel.

I agree that the diesel subsidy pricing is wrong just as wrong are the high excise and sales taxes on fuels but its wishful thinking that the anomalies would go away anytime soon . The diesel prices are controlled because its treated as a lever to control transportation costs and thus food prices - its also because of this that its a political tool and a political decision as much as a fiscal decision. The only hope that one can have of the gap being bridged would be if crude prices cool down which helps bring down petrol prices - thats the practical expectation as articulated by many experts .
When I see car engines being kept running for a long time while it is waiting , I wish that both petrol and diesel prices should reach the century mark as soon as possible!
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Old 24th June 2011, 18:17   #95
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Cesc View Post
Now about the 'good use of our taxes' bit. Honestly if that is what you want then you are barking up the wrong tree. .
It's the right tree even if it down in the list of priorities. And why is it down on priority? It's not just cars using the subsidy. It also includes certain industries (according to TOI), power backup GCs in affluent societies and various cab companies who are making profit out of it. And it is the easiest to prove (if there's anything left to prove).


Quote:
Originally Posted by Cesc View Post
Regarding subsidies in particular - Like it or not we end up using a lot of subsidies not meant for us or at least not needed by us. Reason being - the choice doesn't exist. LPG subsidy is a prime example - it should be for poor households only but people like us who earn six figure salaries a month buy LPG cylinders which are subsidized to the extent of 50%. The atta that you buy (or the one used in restaurants/dhabas/office cafeteria) is largely made from grains pilfered from the PDS (subsidized to the extend of 80%). The universities that we went to are subsidized to the extent of 90%. Can't we pay up full cost of tuition? We obviously can.
I am all for removing subsidy on LPG too. There's nothing I can do about pilferage. If they can remove it, very good. I am willing to pay full price (i.e. subsidy removed) on any product/grain I use/consume.



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Originally Posted by selfdrive View Post
I dont think the thread is attempting to incite guilt in diesel users (at least not my intention!).
Same here.

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Originally Posted by souravc View Post
Low sulphur diesel is as much a reality as unleaded petrol so that arguement does not hold good any more. Europe is one of the largest adopters of diesel as a fuel tech , the continent's track record of being at the forefront of adopting environment friendly fuel techs is unquestionable. Diesel is proven to be beyond doubt a cleaner burning fuel.
Like I have said many times, we are talking about diesel fuel in India not Europe or anywhere else. In India, again according to a TOI article printed about a year ago, with BS4 diesel (which is available in select cities) sulphur content would be down to 50ppm - wayyy above 15ppm in Europe or elsewhere. Oh, the article also said that BS3 diesel was at 350ppm, which is what most of India has now. Plus diesel exhausts have a lot of suspended matter which too are harmful for health.

Once we have European standard diesel, maybe then my argument will be null and void. Till then it holds!
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Old 24th June 2011, 21:12   #96
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Like I have said many times, we are talking about diesel fuel in India not Europe or anywhere else. In India, again according to a TOI article printed about a year ago, with BS4 diesel (which is available in select cities) sulphur content would be down to 50ppm - wayyy above 15ppm in Europe or elsewhere. Oh, the article also said that BS3 diesel was at 350ppm, which is what most of India has now. Plus diesel exhausts have a lot of suspended matter which too are harmful for health.

Once we have European standard diesel, maybe then my argument will be null and void. Till then it holds!
Are you arguing that Indian diesel cars pollute more than European diesel cars or are you arguing that Indian diesel cars pollute more than Indian petrol cars ? Do the petrol cars in India run on Euro IV standard fuel ?

Have a look at the SIAM presentation - diesel gives cleaner/efficient burning , less NOx , less CO2 - neither of them are clean , just that it is to nobody's advantage if we continue our dogged views on a cleaner alternative
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Old 24th June 2011, 21:15   #97
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Baby steps towards diesel price rationalisation taken it seems. TOI is reporting Rs 3 hike in Diesel prices. Petrol price remains the same.

Posted the same here.
http://www.team-bhp.com/forum/techni...hread-102.html
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Old 24th June 2011, 21:28   #98
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Impressive!

Forget the quantum of the price hike. The very fact that they have exhibited the spine to do this is encouraging.

Maybe the cynic in me will end up having to concede defeat!

Link to the news item is here .
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Old 24th June 2011, 22:48   #99
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by asr245 View Post
To many others, who think petrol car owners are seeking revenge - think again! What we want is good use of our taxes. If our taxes go to fund the fuel/electricity/gas/ any other thing, all tax payers should question such policies rather than resorting to petty comments like 'petrol car owners are out to get us'.
I might be wrong but thats what I felt reading some of the earlier posts. I might be wrong though.

And I totally agree with you on better utilization of tax payer's money and hence support complete unsubsidization of diesel prices.

3 Rs/ltr is a case of too little too late. But a welcome move by the govt.

Last edited by Rock 'n' rollz : 24th June 2011 at 22:50.
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Old 26th June 2011, 00:14   #100
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

You guys! The govt of india noticed this thread and has raised diesel prices now!

There goes an extra 150 bucks every time I fill up!

On a more serious note, increasing over all diesel prices or rationaliziing or decontrolling them would ensure soaring prices of basic commodities. And increasing diesel prices only for cars is not a foolproof measure and will result in corruption at the grass root level. The only way is to tax diesel vehicles one time when its being bought{ cars only}. This might make the existing difference of 70-80k to about 1.2 to 1.5 lakh compared to the petrol variants and will turn away a lot of 'irrational' diesel car buyers, who dont actually drive more & just buy it bcoz diesel is cheaper. A person who genuinely drives more will pay the premium.
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Old 27th June 2011, 22:48   #101
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

A diesel car owner already pays more at the time of buying. Rs. 70 - 80K would buy 1000 L of petrol which means 15K Km extra free.
No one buys a diesel car unless their monthly running is >2500 km. Car buyers are an intelligent lot. They are not going to throw away money to the tune of 70-80K just to keep their fuel bills low.
Of course, some premium cars and SUVs have diesel only. Such cars require high torque at low RPM and so it is a necessity. And I'm sure more diesel is used for commercial enterprises like cargo, railways, power generation, etc. than used for personal cars.
It is again a case of discrimination against the minority who have no voice.
I'm all for paying the cost price of diesel with a sales tax though. Transparent fuel pricing and distribution is the key.
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Old 27th June 2011, 23:54   #102
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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The only way is to tax diesel vehicles one time when its being bought{ cars only}. This might make the existing difference of 70-80k to about 1.2 to 1.5 lakh compared to the petrol variants
Agree - diesel mills are anyways costlier to make as compared to petrol ones and there would remain a price difference , a significant one

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and will turn away a lot of 'irrational' diesel car buyers, who dont actually drive more & just buy it bcoz diesel is cheaper. A person who genuinely drives more will pay the premium.
I drive less still I bought a diesel because I love the torque, fuel costs didn't matter I loved that particular make and model and could afford it. I chose it very rationally.
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Old 28th June 2011, 02:34   #103
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

The car I chose is based upon the wants I have and I did spend extra money upfront to buy the diesel ones. Also, the fuel running cost was a factor.
If there is no/not much difference then I would always prefer a petrol head.
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Old 28th June 2011, 09:24   #104
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Irrational Diesel buyers is a reality.
Lots of people in my office and neighbourhood want diesel cars even though all they do is a trip to the mall and to office. Ofcourse, they are not buying it for the torque, just for the perceived savings over petrol.
Hats off to the government for having the spine to increase prices of diesel. But, whats needed is more communication from the PM. He should come up on the TV and explain to everyone the need for this. Without this, even the so called educated class will keep on crying hoarse about the exorbitant prices.
Off Topic: a very popular status update on fb goes "KLPD ho gaya" Kerosene, LPG, Petrol, Diesel
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Old 28th June 2011, 17:01   #105
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

The Govt says it still gives Rs.6.13 / litre subsidy on diesel. It is not clear whether that quantum of subsidy is on base price at the company without the various duties and taxes. Phasing out the diesel price subsidy in a gradual manner isnt going to hurt too much.

I wonder on what price of crude is this calculation and correction is based.
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