[ukderebail]

Realised that the table is not getting displayed . please read the data as country followed by petrol price which is in turn followed by diesel price . The Link is here [url]http://www.drive-alive.co.uk/fuel_prices_europe.html

Thanks Saurav for the link, it proves my point beyond doubt that Petrol prices got to be cheaper, what i compared was the price of 83 octane grade, what the price is quoted is 95 octane, which is India must be currently priced more than Rs 110 per litre. Therefore if abroad the price of 95 grade petrol is just marginally higher than diesel it means that it is competitively priced equal to diesel.

[jalex77]

Originally Posted by souravc

The discussion has gone enough OT - just wanted to point out that I am very well conversant with agri laws of Kerala and the tax laws thus my statement does not have any "ifs" and "buts", I called your bluff as politely as possible . For the rest of the ideological talk , lets save it for another day when I would be interested enough in discussing farmer's dress, education or computers .

Well great, I dont want to take this too OT either or want to be cocky. I would have put my arguments and facts based on the Paddy & Wetlands Conservation Act of Kerala along with the Kerala Land Utilisation Order via P.M to you without bothering anyone, But since you seem to be not interested in anyway whatsoever I do not want to bother you one bit. So lets end this talk about this here as you wish once and for all. No offence I hope?

P.S:- For the record I also happened to be a practicing lawyer and an activist.

[simplyself]

Why would petrol car owners demand higher price for diesel? They may demand lower petrol price but I do not see any reason why they would fight for increase in diesel price.

Fuel - petrol or diesel - is subsidized all over the world.

What is pertinent is to look for the ways to come out of the mess.

A news report a week back said that the increase in demand for diesel outsripped that of petrol for the first time ever and that the demand is mainly driven by large increase in the number of diesel cars sold.

One of the reasons for increase in fuel prices, apart from the variations in market, is the fixed percentage of taxes the fuels attract. This makes for the inflammatory effect on the fuel prices. Why not peg it down to absolute figure per litre of fuel sold. This would soften the rise a little bit. This is the least the government can do. More so because while the government is worried about the financial health of the OMCs due to "under recoveries", it is the main culprit in bleeding the OMCs as there is no let up in taxes. Correcting the tax structure would some what soften the blow.

While it may not be easy to introduce dual price mechanism for diesel users, it is verily possible to introduce a quarterly/annual tax system for diesel cars. Just like the taxi owners pay the quarterly/half yearly/annual road taxes, all the diesel car owners should pay some tax periodically. This, in my opinion, is feasible and easily implementable as the RTOs are implementing this system for taxis/commercial vehicles. And this better than imposing levies on diesel cars at the time of buying.

[jalex77]

Originally Posted by simplyself

Why would petrol car owners demand higher price for diesel? They may demand lower petrol price but I do not see any reason why they would fight for increase in diesel price.

I might say its cause the Government and Oil companies are saying that they are incurring losses(Under recoveries for you and me.) and so Petrol car owners along with bikers say to get it out of the Diesel car owners' pockets not ours.

[Anarchy83]

Originally Posted by ukderebail

Realised that the table is not getting displayed . please read the data as country followed by petrol price which is in turn followed by diesel price . The Link is here [url]http://www.drive-alive.co.uk/fuel_prices_europe.html

Thanks Saurav for the link, it proves my point beyond doubt that Petrol prices got to be cheaper, what i compared was the price of 83 octane grade, what the price is quoted is 95 octane, which is India must be currently priced more than Rs 110 per litre. Therefore if abroad the price of 95 grade petrol is just marginally higher than diesel it means that it is competitively priced equal to diesel.

UKderebail, let me state the following for your clarity:

In India, Diesel and Petrol (before excise) have a difference in price of only approx. Rs. 2.

The inflation of prices by the government in the name of "tax" is what makes petrol almost double the price of diesel. Are we also aware that:

India has the highest (unless I'm mistaken) cost of petrol in the entire APAC region

We all agree that the price of petrol and diesel should be lowered. My point is, bleed the government not the people.

[basky]

Originally Posted by Anarchy83

India has the highest (unless I'm mistaken) cost of petrol in the entire APAC region

And possibly one of the worst quality - by the time it reaches the pump.

[RadiantKarma]

Originally Posted by Anarchy83

In India, Diesel and Petrol (before excise) have a difference in price of only approx. Rs. 2.

What does then explain the difference between the prices of these fuels? Call it what you will, it IS cross-subsidization of diesel by petrol.

The inflation of prices by the government in the name of "tax" is what makes petrol almost double the price of diesel. Are we also aware that:

India has the highest (unless I'm mistaken) cost of petrol in the entire APAC region

Agree with you on this part, rationalization of taxes/duties is of paramount importance.

We all agree that the price of petrol and diesel should be lowered.

Not sure about this. Government finances also need managing.

My point is, bleed the government not the people.

A rather populist statement this. Do you have any idea about the fiscal deficit being stared at this financial year? And why it is important to keep it under check?

[CRtorquefan]

Rather than lowering the prices of Petrol to control the Inflation & for its better reach for Common man. They're going the contrast way i.e even taking away these Imported commodities from even Upper Middle class man reach.

IMHO, This fuel pricing strategy needs a really serious thought process by Govt.

[shashank.nk]

Come to think of it, the government is planning to levy higher duty on diesel cars and the petrol rate is going up like they wont rest till it reaches Rs.100 a litre.

What will be the option left for car-buyers then ? Buy a petrol car and pay Rs. 100 a litre to tank up, or buy a diesel car and pay Rs. 2 lakh extra over a petrol car(1 lakh to the manufacturer as already charged, and the other to the govt)

Looks like the government wants whole of India to shun cars, go green, and buy cycles

[Anarchy83]

Originally Posted by RadiantKarma

What does then explain the difference between the prices of these fuels? Call it what you will, it IS cross-subsidization of diesel by petrol.


Agree with you on this part, rationalization of taxes/duties is of paramount importance.


Not sure about this. Government finances also need managing.


A rather populist statement this. Do you have any idea about the fiscal deficit being stared at this financial year? And why it is important to keep it under check?

Brother, you keep saying "subsidization". Why should the government make petrol subsidize diesel? That's like saying gold subsidizes silver. It's senseless...

Lets leave this subsidization to one side as it is baseless speculation. If you have facts and figures to prove the financial benefit of subsidizing diesel with petrol to the government from a verified source, we can continue.

About the populist statement - nope, disagree with you here again. We Indians generally behave like a herd of cows - we can be pushed one way or the other. Since you've raised this subject, no RK, I do not know of the fiscal deficit you've spoken of. Can you help all of us to understand:

a) What exactly is the fiscal deficit?
b) How does crude imports factor into it?
c) How does the recent Rs. 1.8 increase in petrol help our situation, in terms of the projected increase in revenue?
d) If we increase the price of diesel, will it not directly increase the inflation?

[volkman10]

" According to a report in Business Line, the petrol variant can possibly see a shoot in demand next year provided the proposal to increase the excise duty on diesel cars finds a way in the Budget 2012-13. The report states that the sales of petrol cars are likely to see an increase because of the increase in initial cost of purchase of diesel cars after April 2012. This is because the ownership benefit availed by the customers of diesel cars is likely to face a setback. Presently, the difference of price between petrol and a diesel car is about 16 to 25% though the manufacturing costs are quite similar."


Excise Duty On Diesel Cars To Increase | MotorBeam - Indian Car Bike News & Reviews

[shashank.nk]

I doubt they'll increase it next year. Its all about politics in our country and the most important state for the Congress, UP goes into elections next year. I'm sure they'll want to be back in power and they won't risk hiking diesel car prices

[volkman10]

Uncertain diesel pricing policy hits expansion plans of several carmakers, including Maruti Suzuki & Hyundai India

See pg 11 of report, quoted below!

"India’s government is likely to boost the excise tax imposed on sales of new diesel cars in the next federal budget, according to a November 20 report from Business Line(India).
"Despite frantic lobbying by the automobile industry, the government is likely to hike the excise duty on diesel cars in the next budget," according to the report.
"While the Petroleum Ministry has been asking for some sort of check on diesel cars with a view to capping the burgeoning demand for diesel, the Heavy Industries Ministry has been opposing this. Now, the Heavy Industries Ministry, the nodal ministry for the automobile sector, is learnt to have indicated its support for increasing the excise duty.
''This will be bad news for the automobile sector, as the soaring demand for diesel cars has been helping to prop up sales volumes, even as sales of petrol variants have taken a hit after the recent surge in fuel prices."
"Auto industry calls for cutting excise tax on bigger cars "is also unlikely to be accepted" in the next budget, according to the report.
"The Petroleum Ministry has been pitching for higher excise duty on diesel cars in order to reduce the subsidy on diesel. As diesel is cheaper by over Rs 25 [US$0.48] a liter, the rising demand for diesel driven by higher diesel car sales has been pushing up losses for the petroleum marketing firms," the report noted.
"At present, oil marketing companies [India’s refiner-marketers] are selling diesel Rs 10.17 [US$0.19] cheaper than its cost. The loss on diesel for these companies in the first half of the year is estimated at Rs 37,719 crore [US$7.2 billion]," according to the report .

[avira_tk]

I think a 10 rupees phased hike is possible on diesel after the upcoming state elections. Taxing diesel cars is just plain populism, what kind of justification do you have when you decide to up your running costs by opting for a petrol car. The whole argument about subsidised diesel for luxury imports is nonsense, the buyer pays nearly 100% of the cost price in taxes, then in places like Bangalore another 20% in road tax. The luxury car owner pays in one shot ,more taxes than the biker will possibly do in one lifetime, a smart person need not triple his running costs(I am talking about the common luxury cars' diesel vs petrol economy ) to placate the jealous mob. Those who get worked up about paying Rs 70 for a litre of petrol for their bike, and then see a 7 series filling up at 46/ltr should remember that the BMW owner has paid the cost of about 20 bikes in taxes to get this cheap fuel.

[mayankk]

Originally Posted by avira_tk

I think a 10 rupees phased hike is possible on diesel after the upcoming state elections. Taxing diesel cars is just plain populism, what kind of justification do you have when you decide to up your running costs by opting for a petrol car. The whole argument about subsidised diesel for luxury imports is nonsense, the buyer pays nearly 100% of the cost price in taxes, then in places like Bangalore another 20% in road tax. The luxury car owner pays in one shot ,more taxes than the biker will possibly do in one lifetime, a smart person need not triple his running costs(I am talking about the common luxury cars' diesel vs petrol economy ) to placate the jealous mob. Those who get worked up about paying Rs 70 for a litre of petrol for their bike, and then see a 7 series filling up at 46/ltr should remember that the BMW owner has paid the cost of about 20 bikes in taxes to get this cheap fuel.

the purpose of the subsidy was never for passenger cars.
Most fuel companies in India carry the full portfolio.
The subsidy burden has to reflect on another product.

I have no qualms about paying 70 bucks, and I certainly dont hold it against a diesel Beemer, but i found the reasoning of him having paid "20 times the cost of a bike to get cheap fuel" irrelevant.