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Old 18th January 2013, 10:33   #1066
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

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And I am not against the PDS system, but where is the accountability / responsibility? Did they moved any stone to close the biggest drain - corruption in PDS system + rotting of grains etc?
Yes. Once DTC is implemented across the country, it will replace PDS slowly.
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Old 18th January 2013, 10:48   #1067
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

The move to give freedom to OMCs to execute small corrections in diesel prices without approvals is a well planned strategy to deflect the potential political fallout of a fuel price hike. But I am circumspect on

a) Time frame for this move crosses the term left for the current govt. assuming model code of conduct comes into effect by Feb-Mar, 2014. What happens then? Would the new govt roll back these measure?

b) All the assumptions of under recoveries are based on current oil prices? If oil rallies, these assumptions will fall flat. So in essense this is not a de-regulation

c) Dont remember any govt. fighting elections in the back drop of "diesel" price hikes.

d) Oil India disinvestment is supposed to happen in Feb. Is this a calculated move?

Last edited by arup.misra : 18th January 2013 at 10:50.
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Old 18th January 2013, 11:10   #1068
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

Although having just booked a diesel car this week (Skoda Yeti), I think this is a good move, albeit too quite late in the day. The UPA2 govt should have done this as one of the first things as it came to power. Such piecemeal reforms dont achieve anything. On the other hand, this govt also has a shady reputation of announcing reforms and then rolling back. So permanancy of these reforms need to be seen.
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Old 18th January 2013, 11:35   #1069
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

While this move to hike price of diesel over a period of months might cause discomfort to various sections (the only section that bothers me is the low income groups for whom food/essentials will become dearer, with everyone using this 50paise increase as a ruse to hike prices), I believe it is a good move to remove the disparity between pricing of both fuels. Better late than never.

Hopefully the unnatural skew between sale of petrol/diesel models of cars will be checked once the prices come on par (if it does).
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Old 18th January 2013, 11:44   #1070
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

Am waiting for Auto sector's response to this news. The already slow growth might get more complicated since many buyers would not be sure where will this fuel policy finally head to.
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Old 18th January 2013, 12:16   #1071
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

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Am waiting for Auto sector's response to this news. The already slow growth might get more complicated since many buyers would not be sure where will this fuel policy finally head to.
Hello Drmohitg,

I feel Indian Auto Industry will now move ahead in right direction.

Till yesterday, Car manufacturers we in a confusion as petrol cars (for which they had huge manufacturing capacities) we are selling in lesser numbers month on month & the unclarity over Diesel prices was in someways preventing them from expanding their Diesel Car Manufacturing facilities.

Also for the Car buyers (specially for those who were choosing Diesel Cars just to save fuel costs) the situation is now clear - with sometime (1 - 2 years) Diesel will be totally deregulated & its prices will be almost at par with petrol (probably 5 - 10% lower).

Thus it is a clear cut picture for manufactures & buyers where the buyers can chose petrol or diesel cars based on real need & manufacturers can produce Car based on consuner buying patterns.

Thanks,
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Old 18th January 2013, 12:29   #1072
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

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Also for the Car buyers (specially for those who were choosing Diesel Cars just to save fuel costs) the situation is now clear - with sometime (1 - 2 years) Diesel will be totally deregulated & its prices will be almost at par with petrol (probably 5 - 10% lower).
I wonder what will be done by people who bought diesel cars even though their usage was quite low.

Perhaps in resale/ used car market, demand for diesel cars will take a hit and people demanding ridiculous prices would have to rethink or be willing negotiate a bit more. Not sure if it would translate to better demand for petrol cars though!

Last edited by selfdrive : 18th January 2013 at 12:32.
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Old 18th January 2013, 12:34   #1073
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Talking Re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by drmohitg View Post
Am waiting for Auto sector's response to this news. The already slow growth might get more complicated since many buyers would not be sure where will this fuel policy finally head to.
In a way it is good, at least from my perspective. Diesel ONLY manufacturers like Mahindras, Tatas, Toyotas et all will explore into the Petrol Segment. Honestly, There is no Petrol Engine option avialble with most SUVs like Safari, Scorpio, Bolero, Thar etc. Heck Even Petrol Innova has a 3-4 month waiting period

I am waiting for that 2.7 VVT Engine on the Fortuner, which is currently available in singapore. . My usage would be less than 7000 kms per Annum, right per year and Diesel does not justify the same. I am looking for a petrol SUV close to 25 lacs OTR but there are none.
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Old 18th January 2013, 12:36   #1074
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I bet its the auto sector's influence that has the diesel prices are being raised in 50 paise increments and this is the reason they're totally mum about it.the government has agreed to their demand of not levying any taxes on diesel cars..

And now they get a few quarters time to adjust their diesel heavy strategy accordingly..
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Old 18th January 2013, 12:42   #1075
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Thumbs up Re: Rationalising diesel prices*Update: 50p rise/month announced*

The major takeaway for me is that Diesel has been completely deregulated for bulk consumers of diesel namely the Railways, the defense forces etc. This should bring down the subsidy burden on the government by a big margin.

Read somewhere that Indian Railways is the single largest consumer of diesel accounting for a high double digit percentage of diesel consumption in the country.

So the only people who are continuing to have subsidized diesel are the truckers (road transport segment) and the private vehicle owners.

I think, it is smart move by the government to reduce subsidies over a period of time rather than do steep hikes once in a while.
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Old 18th January 2013, 12:45   #1076
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

I don't believe the auto sector has to be blamed here. Blame it on the irrational policies of the govt. Better late than never is all I can say. The policies framed by the govt should be consistent else manufacturers would think twice before investing their money here.
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Old 18th January 2013, 12:49   #1077
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by scopriobharath View Post
My usage would be less than 7000 kms per Annum, right per year and Diesel does not justify the same. I am looking for a petrol SUV close to 25 lacs OTR but there are none.
What about the Mitsubishi Outlander? Sorry I dont know what its priced for or whether it meets your other requirements
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Old 18th January 2013, 12:49   #1078
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

We might see some price correction for diesel car models. Manufacturers have been making lot of money demanding 1-1.25L for diesel models over their petrol siblings. That might come down to a more acceptable 70-80K as it was 2-3 years back. It might also encourage some manufacturers to bring advanced petrol engines to India.

My next car will probably still be diesel
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Old 18th January 2013, 12:49   #1079
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

Finally GOI has woken up and dared to take this long awaited step, albeit small in terms of 50p/month but still significant if they stick to the plan. I see this as a good news as well as bad.

Good because oil subsidies are drilling hole is tax payers pocket. Fuel bills are one of the biggest cause of foreign exchange outflows.

Bad news because this will affect commercial transport and agriculture sector pretty badly which would be eventually compensated by increase in price of services and commodities. So the one who is going to suffer is again the common man.

I have seen in some European countries they sell diesel at subsidized rates to farmers but many a times these farmers sell this subsidized diesel to normal people so it isnt exactly fool-proof. I feel the earlier plan of putting some special tax on diesel vehicles at the time of sales itself was a better option.
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Old 18th January 2013, 12:50   #1080
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Default Re: Rationalising diesel prices*Update: 50p rise/month announced*

But what is to ensure that the petrol prices are not jacked up further once the disparity between the 2 fuels comes down? I have a feeling this is just a way of playing with our psyche. Gradually increase the petrol prices to atrocious levels followed by a slow increase in diesel prices until people get used to the new price levels and adjust accordingly. There is no stopping them to then further increase prices of petrol once again. Afterall social schemes being run by the GOI are here to stay since they do not address the root causes of poverty and unemployment etc. And the govt is just going to be needing more funds for these ever increasing schemes and scams that follow most of them.

So even though I would be glad to see the fuel pricing fiasco getting corrected, deep down I fear if its a sham.
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