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Old 4th April 2013, 16:36   #1186
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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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
So rural India has no middle class, right?
They are just rural Indians and cannot be classified into rich, middle class and poor. Right?

Its not that the rural people don't use smaller diesel engines. Where do you think the 'ape' trucks and the likes sell? You and me don't buy them neither every other trader keeps them for his shop. Its the rural guys who buy these and come to cities everyday for work.

Nobody, including the beat diesel owner, likes to pay through the nose for basic necessities who's prices will be driven through the roof on pretext of increased transport costs, which may, however, make little actual difference to them. So there goes the Beat owners vote.
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Old 4th April 2013, 17:27   #1187
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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So rural India has no middle class, right?
They are just rural Indians and cannot be classified into rich, middle class and poor. Right?

Its not that the rural people don't use smaller diesel engines. Where do you think the 'ape' trucks and the likes sell? You and me don't buy them neither every other trader keeps them for his shop. Its the rural guys who buy these and come to cities everyday for work.

Nobody, including the beat diesel owner, likes to pay through the nose for basic necessities who's prices will be driven through the roof on pretext of increased transport costs, which may, however, make little actual difference to them. So there goes the Beat owners vote.
Several well-known studies have estimated the size as being around 25-30% of the population (http://en.wikipedia.org/wiki/Standar...iving_in_India). What I meant by pointing out rural population (which even you have to admit as a group, is poorer than the urban population) is 70%, so your figure is just impossible!! Don't quote numbers, especially when its something as outlandish as 70% of the population (800 million middle-class? Really? Prove it to me please and to a lot of interested consultants and economists as well, I am sure)

Last edited by crazydave : 4th April 2013 at 17:28. Reason: grammar
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Old 4th April 2013, 23:15   #1188
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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Several well-known studies have estimated the size as being around 25-30% of the population (http://en.wikipedia.org/wiki/Standar...iving_in_India). What I meant by pointing out rural population (which even you have to admit as a group, is poorer than the urban population) is 70%, so your figure is just impossible!! Don't quote numbers, especially when its something as outlandish as 70% of the population (800 million middle-class? Really? Prove it to me please and to a lot of interested consultants and economists as well, I am sure)
You are talking about the word to word definition of middle class population and I'm generalizing the term. I'm only excluding those who are rich enough and those who are less fortunate and do not have the means to even make the ends meet.

If you want to quote the exact numbers then even you will agree and laugh at those consultants and economists who have defined the BPL as those whose income is below Rs28 a day.

PS- We are going seriously OT here.
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Old 5th April 2013, 00:17   #1189
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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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.
When you say "just a small amount", how much is it? Every car company in India consistently prices their diesel cars approximately 1-1.25L above their petrol cars. Just because they could price it whatever they want to? The turbo, the suspension, the sturdier parts etc, does not add up to 1L?
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Old 5th April 2013, 00:40   #1190
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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When you say "just a small amount", how much is it? Every car company in India consistently prices their diesel cars approximately 1-1.25L above their petrol cars. Just because they could price it whatever they want to? The turbo, the suspension, the sturdier parts etc, does not add up to 1L?
I doubt it adds up to 1 L. In 2007, the Swift Diesel was priced 50K more than the Swift Petrol.
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Old 5th April 2013, 07:21   #1191
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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I doubt it adds up to 1 L. In 2007, the Swift Diesel was priced 50K more than the Swift Petrol.
The 2007 swift petrol didn't fall into the small car category and attracted a higher excise due to its 1.3 liter petrol engine.

OK, consider this. Fiat Punto diesel is priced 1L more than the Punto petrol. Now, if the actual cost difference is only, say 25K, if Fiat gets less greedy and drop it's price by 75K, it would sell like hot cakes. Is Fiat so greedy that they wouldn't price their car properly even if it doesn't sell?

How much does a turbocharger cost? Somebody who has replaced one can comment on that?
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Old 5th April 2013, 11:27   #1192
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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PS- We are going seriously OT here.
Right you are.

Moving on, I think we're going to see softening in petrol prices (as evidenced by the recent 80p cut) continuing into the future.

The major reason behind this is increasing energy self-sufficiency of the US thanks to shale gas and increasing prospect that Arctic/Alaskan areas will be allowed to be tapped for oil. Reduced demand from the worlds largest consumer of oil will have a knock-on effect on global oil prices, and despite growth in India/China, its going to be a while till we fill the vacuum left by the US! Of course, since this is oil, geopolitical issues such as Iran, formation of an independent Kurdish nation, takeover of the Saudi establishment by Wahabbis are also potential powder-kegs waiting to explode, that can result in oil prices shooting up again.

I also think that now deregulation of diesel has started, even if the Congress combine does not come back into power in 2014, the opposition (excepting the idiotic Left) also realizes that this is inevitable and needs to be done if we are not to go begging around the world to fund our Current Account Deficit (driven mainly by oil imports). We should therefore reach parity of prices by 2015-16
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Old 10th May 2013, 21:47   #1193
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

Diesel price hiked by 90 paise per litre effective midnight

http://profit.ndtv.com/news/economy/...idnight-322065

oil companies combined 2 months due today and raised diesel price by 90 paise.
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Old 10th May 2013, 22:08   #1194
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

Hello,

Diesel prices hiked by Rs. 1 with effect from mid-night tonight.

The revised diesel prices in metro cities will be as follows:
Delhi Rs. 49.69
Kolkata Rs. 53.97
Mumbai Rs. 56.04
Chennai Rs. 52.92

With clear verdict in Karnataka elections, seems Government is really pulling up it's socks. I think the difference between petrol & diesel prices is approx Rs. 13 - 15 now. Also with every increase in prices of Diesel, the scope of reduction in Petrol prices is higher as subsidy burden on oil marketing companies (& government) is reducing.

Thanks,
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Old 12th May 2013, 09:43   #1195
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

Diesel -petrol price difference in Chennai is approx 12 Rs. In Bangalore is approx 15 Rs.

I will stick to Shell diesel from my last fill. Difference of Rs.3.5 between Govt. and Shell Diesel is worth it in every way!
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Old 12th May 2013, 10:57   #1196
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

I'm wondering whether the diesel price deregulation procedure is almost complete or not?

When the govt. started this deregulation procedure, the diesel was supposed to be making a loss of 10-11 rupee per liter for the oil companies then, when compared to petrol. Now that we are almost closing the said gap, isn't it time for the oil companies to stop increasing diesel price further?
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Old 12th May 2013, 11:02   #1197
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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I'm wondering whether the diesel price deregulation procedure is almost complete or not?

When the govt. started this deregulation procedure, the diesel was supposed to be making a loss of 10-11 rupee per liter for the oil companies then, when compared to petrol. Now that we are almost closing the said gap, isn't it time for the oil companies to stop increasing diesel price further?
I don't think there is much difference in production costs of diesel and petrol. So may be diesel price should be increased or petrol price should be decreased till some kind of parity is achieved. There is no reason for a Rs. 15 difference between petrol and diesel.
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Old 12th May 2013, 11:05   #1198
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The tax structure on petrol and diesel is different. To achieve parity in pricing, the taxes need to be similar regardless of same production costs
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Old 12th May 2013, 11:14   #1199
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

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I don't think there is much difference in production costs of diesel and petrol. So may be diesel price should be increased or petrol price should be decreased till some kind of parity is achieved. There is no reason for a Rs. 15 difference between petrol and diesel.
I'm not much into the technicalities of the production cost. I was basing my calculation on what the govt. maintained at the beginning of this deregulation process. The oil companies were ought to be satisfied, and the process complete, if diesel was priced ~60/- then, when petrol was running on ~72/-

The Rs. 12/- difference then comes to 20% above the diesel price; and now, Rs. 12/- difference (in Chennai as mentioned by someone above) makes the percentage difference go above 20.
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Old 12th May 2013, 11:37   #1200
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Default Re: Rationalising diesel prices. *Update: 50p rise/month announced*

I saw in the news article that after the latest increase, now the Oil companies have an under recovery of Rs.3/- per litre on Diesel. This is at current prices of crude and dollar exchange rate.
At this rate, I think they may increase it upto Rs.56/57 in Bangalore (from the current Rs.54/-) over the coming 6 months, and leave it at that.
Gap between Petrol and Diesel is likely to remain in the region of Rs.8-10/- per litre.

And to think, when I brought my diesel car in 2012, the gap was Rs.34/- per litre (Rs.45 for diesel v/s Rs.79 for petrol). A lot of water has flown below the bridge since. At current prices, it does not make sense going for a diesel vehicle only for cost savings. If it is for driving pleasure, then its a different story altogether.
As per my estimates, the fuel cost per km between Petrol and diesel is in the region of Rs.2/- per km. You need to run the car for 80000 kms before you can break even for an I20 petrol and diesel (which has a cost difference of almost Rs.1.5 lakh for a petrol v/s diesel model)

Not worth it IMHO.
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