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Old 29th March 2013, 16:43   #1171
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

I'm not debating petrol v/s diesel. Thats the economics each person has to figure out for himself. Buy whichever you like or whichever makes economic sense to you.

I was debating about the case you suggested. Banning smaller diesel engines.

First of all, India is a democracy where vote bank decides who comes to power. Ban the smaller diesel engines and the middle class will throw away the govt. After all, they comprise ~70% population.

Secondly, I agree word to word what @carboy says.

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Originally Posted by nitinbose View Post

I'm also getting a feeling that there's actually no subsidy on diesel,
I agree with this statement.
How come a company's balance sheet show a huge profit when they are selling their product at a loss?
If they're getting subsidies to make up for the losses, they are paying heavy dividends to the share holders(govt being the biggest). Its a give and take relationship. You give one, you take one. It negates to zero. So why complicate? Stop reaping dividends, stop paying subsidies. Simple. Isn't it?
This will also clear the doubts in the minds of the public if all the brauhaha about subsidies is justified.
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Old 31st March 2013, 20:15   #1172
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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So if I buy a more expensive house, I should get cheaper electricity and water because I paid more taxes on the house than a guy who bought a less expensive house?.
Not exactly, but what I'm saying is that he's already paid up for the so called subsidy upfront in terms of taxes.

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Originally Posted by carboy View Post
So why did you buy a diesel Skoda?
I would have happily bought the L&K petrol or even a Passat highline petrol if it were available.


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Originally Posted by carboy View Post
Likewise, expensive houses are much lesser than the cheap houses. So they should surely get cheaper electricity and water.
There is subsidy for neither expensive nor cheaper house, unlike the so called diesel subsidy - a great eyewash! Furthermore, there's nothing like cheap houses, atleast in Bangalore where a 2BHK still costs a minimum of 40L upwards!



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Originally Posted by carboy View Post
Anyway, I think if diesel is priced same as petrol, diesel car owners will stop charging the huge premiums they charge now - people won't pay it. Ergo, the price difference between a petrol and diesel Superb will become less.
The additional price on diesel vehicle is due to the so called additional taxes but only charged extra by certain dealers such as Toyota. If you're thinking between a petrol and a diesel versions in Toyota, there's not much of a difference when you think of the overall cost of the vehicle, unlike Skoda or VW!

Last edited by nitinbose : 31st March 2013 at 20:17.
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Old 31st March 2013, 20:57   #1173
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Originally Posted by nitinbose View Post
Not exactly, but what I'm saying is that he's already paid up for the so called subsidy upfront in terms of taxes.
Exactly what I am also saying - the guy buying the more expensive house has already paid for a electricity/water subsidy upfront in terms of taxes - and he isn't getting that subsidy.

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Originally Posted by nitinbose View Post
I would have happily bought the L&K petrol or even a Passat highline petrol if it were available.
So paid the extra 5 lakhs because found it to be best suited for you & not because you were thinking that it was an upfront subsidy payment.


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Originally Posted by nitinbose View Post
There is subsidy for neither expensive nor cheaper house, unlike the so called diesel subsidy - a great eyewash! Furthermore, there's nothing like cheap houses, atleast in Bangalore where a 2BHK still costs a minimum of 40L upwards!
But the guy who bought the 80L house paid more taxes upfront than the guy who bought the 40 L house. So he deserved subsidised water and electricity in lieu of what he paid upfront, right?
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Old 1st April 2013, 09:53   #1174
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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So paid the extra 5 lakhs because found it to be best suited for you & not because you were thinking that it was an upfront subsidy payment.
I wanted the L&K model which is only available in diesel and was fully aware that I'm shelling out extra taxes however there is no other option. Had there been a petrol version (in Laura L&K or Passat highline), I'm sure it would have been around 5L less and I would have happily bought it.



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Originally Posted by carboy View Post
But the guy who bought the 80L house paid more taxes upfront than the guy who bought the 40 L house. So he deserved subsidised water and electricity in lieu of what he paid upfront, right?
I really dont understand the logic of bringing the house pricing here. Nobody gets any subsidies in the case of houses and neither petrol nor diesel is applicable here.

In the case of houses, there aren't any additional taxes as the price goes up, its always a percentage of the overall value, unlike for cars where there are additional taxes imposed on the ex-showroom for cars above certain engine capacity and size.

So the bottom line is that such users never benefit from the so called subsidy, so no need for the hue and cry.

In any case, as I'd mentioned before, its the petrol prices that must be brought down as cars are becoming a common means of transport rather than a luxury. The so called subsidy is nothing more than an eyewash. Even if some farmer is getting the subsidized diesel, it would some heavily adulterated diesel - wonder whether we can even classify them as diesel.
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Old 1st April 2013, 13:00   #1175
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Originally Posted by nitinbose View Post
I wanted the L&K model which is only available in diesel and was fully aware that I'm shelling out extra taxes however there is no other option.
So now don't expect cheaper diesel just because you paid the extra taxes. The extra taxes were unrelated to diesel.

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Originally Posted by nitinbose View Post
I really dont understand the logic of bringing the house pricing here. Nobody gets any subsidies in the case of houses and neither petrol nor diesel is applicable here.
Nobody gets subsidies on elec/water in case of houses just because they paid more taxes while buying the house. In exactly the same way, no one should expect subsidies on fuel just because they paid more taxes while buying the vehicle.
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Originally Posted by nitinbose View Post
So the bottom line is that such users never benefit from the so called subsidy, so no need for the hue and cry.
They are benefiting. They are getting the benefit of a diesel subsidy. If there wasn't a diesel subsidy, you would have paid more for your diesel. So obviously, you are benefiting.
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Old 1st April 2013, 17:08   #1176
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Originally Posted by carboy View Post
So now don't expect cheaper diesel just because you paid the extra taxes. The extra taxes were unrelated to diesel.
Why should I pay the extra taxes for the diesel vehicle? The very reason why the extra taxes are levied is to nullify the diesel subsidy which one can possibly enjoy! Else both diesel and petrol cars should cost close!



Quote:
Originally Posted by carboy View Post
Nobody gets subsidies on elec/water in case of houses just because they paid more taxes while buying the house. In exactly the same way, no one should expect subsidies on fuel just because they paid more taxes while buying the vehicle.
Nobody pays more taxes when buying the house, its always a constant percentage of the total value (Land, building etc). Nobody gets any subsidies whatsoever be it you are a farmer, below poverty line etc.,

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Originally Posted by carboy View Post
They are benefiting. They are getting the benefit of a diesel subsidy. If there wasn't a diesel subsidy, you would have paid more for your diesel. So obviously, you are benefiting.
How would you expect someone to enjoy the diesel subsidy when he/she has paid the "savings" upfront in terms of taxes. I paid around 500K extra for the diesel car in comparison with the petol version (if it were to exist), so where am I getting the subsidy?

I'm not sure how to explain this further.
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Old 1st April 2013, 17:17   #1177
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

What is the actual difference between diesel and petrol cars? This should be discounting the extra price for the turbo motor installed in diesel cars. Dont they come closer?
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Old 1st April 2013, 17:18   #1178
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Originally Posted by A M View Post


I agree with this statement.
How come a company's balance sheet show a huge profit when they are selling their product at a loss?
There is a diffeance between under recovery and loss. They cry hoarse for under recoveries
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Old 1st April 2013, 19:39   #1179
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

Quote:
Originally Posted by nitinbose View Post
Why should I pay the extra taxes for the diesel vehicle? The very reason why the extra taxes are levied is to nullify the diesel subsidy which one can possibly enjoy! Else both diesel and petrol cars should cost close!


How would you expect someone to enjoy the diesel subsidy when he/she has paid the "savings" upfront in terms of taxes. I paid around 500K extra for the diesel car in comparison with the petol version (if it were to exist), so where am I getting the subsidy?

I'm not sure how to explain this further.
I know that diesel vehicles are more expensive than their petrol counterparts but I am not aware of any extra taxes on diesel cars? Can someone validate this; what's the additional tax percent?

I am aware that diesel cars are harder and more expensive to make, hence the difference in pricing, which is why I assumed that the extra costs will go to the car manufacturer, not the government, so the buyer isn't paying the subsidy upfront so the diesel subsidy is an undue advantage to diesel car owners instead of it being meant only for the less fortunate Indians.
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Old 1st April 2013, 21:08   #1180
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Originally Posted by nitinbose View Post
Why should I pay the extra taxes for the diesel vehicle? The very reason why the extra taxes are levied is to nullify the diesel subsidy which one can possibly enjoy! Else both diesel and petrol cars should cost close!
There aren't any extra taxes levied on diesel vehicles. Diesel engines are more expensive to manufacture. That's why diesel vehicles are more expensive. Plus, because of the demand for diesel vehicles companies build a higher premium into the price.

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I'm not sure how to explain this further.
The problem isn't in the explanation. The problem is with your facts.

Last edited by carboy : 1st April 2013 at 21:09.
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Old 2nd April 2013, 00:11   #1181
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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There is a diffeance between under recovery and loss. They cry hoarse for under recoveries
I didn't study economics beyond 10th standard. Thats why I used the two words inter-changably.
Did a bit of googling and I got a fair idea of the difference between the two.

Okay then, what I understood is that under-recovery is the difference between the retail price in the domestic market and the retail price in the international market. It means if diesel is retailing at 100/- in India and 150/- in Europe, the OMC's are making an under-recovery of 50/-.
Now, cost price of diesel to the OMCs may be 60/- so they are still making 40/- profit while their under-recovery is 50/-.
This means they are asking the govt to make up for the difference in their 'could be profit' and actual profit they are making and the govt wants to tax its citizens to make up for imaginative losses its firms are making.

Damn, I love my India.
This govt is definitely of the people, by the people and FOR the people.
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Old 2nd April 2013, 00:12   #1182
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Originally Posted by carboy View Post
There aren't any extra taxes levied on diesel vehicles. Diesel engines are more expensive to manufacture. .
Nope. Diesel engines are more expensive by just a very small amount. The reason diesel cars cost more is because companies can price them higher. So if a diesel engine costs 20,000 more to manufacture, the company will price it 1L higher because it can do so.
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Old 2nd April 2013, 18:53   #1183
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Originally Posted by srishiva View Post
What is the actual difference between diesel and petrol cars? This should be discounting the extra price for the turbo motor installed in diesel cars. Dont they come closer?
This is on the basis of what the car vendors tell me, though I've not had a chance to verify this.
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Old 2nd April 2013, 20:42   #1184
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Originally Posted by tsk1979 View Post
Nope.
I wrote the stuff about the premium in the line after the one you quoted!

Quoting it again here
Quote:
Originally Posted by carboy View Post
Diesel engines are more expensive to manufacture. That's why diesel vehicles are more expensive. Plus, because of the demand for diesel vehicles companies build a *higher premium into the price*.
Quote:
Originally Posted by nitinbose View Post
This is on the basis of what the car vendors tell me, though I've not had a chance to verify this.
May be you should ask them to subsidize your diesel or rather compensate you for the under recovery of the supposed higher taxes you paid to them.

Last edited by carboy : 2nd April 2013 at 20:44.
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Old 4th April 2013, 14:04   #1185
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Originally Posted by A M View Post
First of all, India is a democracy where vote bank decides who comes to power. Ban the smaller diesel engines and the middle class will throw away the govt. After all, they comprise ~70% population.
I seriously question your statistic. The middle-class in no way comprises 70% of the population, heck, rural India itself is 70% of the population! On your statement of vote bank considerations affecting diesel pricing, I agree, however the government is more likely to get voted out of power because farmers do not get cheap diesel(+kerosene) for their pumpsets than by angry Beat Diesel owners not getting cheap diesel
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