[souravc]

Originally Posted by GTO

Loss for words, really.

On a lighter note:

- ICICI Bank abandons the car loan market. Now, they will only market petrol loans!

- Manufacturers abandon out-of-town roadside assistance. Car owners were using the towing facility to get their cars back home free.

Banks would be stressed since there are likely to be cases of default by petrol car owners on loans as the saleability of 2nd hand petrol cars would surely get hit .

Continuing on the lighter vein - There is likely to lesser drunken driving cases as not many people can afford alcohol and petrol at the same time

I don't see the diesel - petrol arbitrage getting smaller in the foreseeable future . Our politicians are brainless and they lack the guts to take a bold step which is needed to withstand the backlash that removing subsidies from diesel and LPG would result in .
Thank God I bought a diesel , suddenly my breakeven is down to less than 2 years of driving (and thats not taking into account better resale value!)

[anand_lukose]

A significant chunk of the money we pay on Petrol and Diesel goes as tax to the government.Why cant the central govt reduce the tax on fuel (that is used to bailout the OMCs) and keep the fuel price monitored every week/fortnight ?

in a nutshell, the OMCs will sell fuel without major losses and the correct price reaches the consumer after factoring Oil price volatility, currency fluctuation etc. This question was asked in a popular business channel couple of months back and one expert from the govt mentioned the tax structure being too complex to be removed.

I dont understand the logic where one buys petrol at a high price, half of which goes as tax which in the ends up buffering the OMCs. This keeps fuel prices really high.

[pratheekkunder]

Originally Posted by himanshu_j

I don't mean to argue but what about this article:
For petrol, Indians shell out the most in the world - Times Of India

Thats true. May be the Purchasing Power Parity is on the higher side for this country. Let me check that himanshu

Originally Posted by oss

In the debate on subsidy or no subsidy we often miss out the point that almost half of the price we pay for the fuel at the gas station is made up of duties and varies central & state taxes.

I am all for government removing the subsidies, but they should also bring down the skyhigh duties & taxes on fuel to lessen the impact on common man. Everytime the price goes up the govt's share of the loot keeps going up; they can atleast make it revenue neutral for the govt and make the price increase moderate.

Agreed, but thats how country is run. Without state tax and duties, there will be less way where Govt will get some revenue. India's imports 1/3 rd of Crude out of all other products. So petrol is the major source of revenue.
But sometimes these revenues are mis-used and goes to babus pocket.

[hrman]

Oh God.. Feeling really sorry for petrolheads. Am somewhere glad I switched to a diesel car a month back. I do have a scooter though, which will feel the impact of the hike. Now I guess the break even for a diesel car drops by a few months, given the huge difference in Diesel and petrol fuel prices.

I remember a few years ago when it was the BJP government, and the then FM had quietly slipped in service tax of 8%. The then great poet of a PM had the audacity to say in Hindi "All Indians must contribute in Tan, Man, Dhan" (body, heart and wealth). Now in the opposition chair they can do nothing but blame the current govt. Am sure if they were ruling the situation would not have been any great either.

In the current scenario, those who used to fill petrol from Shell, would not find much of a difference though. Any ideas on how much is Shell increasing petrol by? The new gap should be less than a rupee I think. Time to switch to shell till they hike prices again.

[DexterMorgan]

Just lost couple of more hair after reading about price hike.

Every petrol price hike gives my parents and brothers an opportunity to pick on me for owning a petrol Skoda.

I can see myself retiring as Clint Eastwood from 'Gran Torino'. I will have a brilliant car of its time i.e. a Laura TSI in my garage but all i will do is clean it and polish it everyday but not drive as i will not be able to afford gas to run it.

Originally Posted by MAS

Does this mean Diesel cars are going to be more expensive?

Not sure about new diesel car prices but resale value will definetly shoot up.
Heck, my father is already getting mouth watering offers for his 3 years old 60k+ on ODO Ford Figo TCDI which needs new tires and insurance renewal in coming months.

[GenuineOptimist]

Originally Posted by man_and_machine

The marco economics works otherwise, because there is a 25% earning enough to spend, the rest 75% are still able to earn their living. In a indirect way the higher spending markets always create a mushroom of smaller economy around them.

Point in case, when the economic slow down happened only the IT sector in India was affected severly ( I know the lending rates were also increased and industry suffered, but that will complicate the example). This affected in companies cutting cost immediatly, lesser cabs were used, lesser coffee machines were supported, lesser team outing were allowed, only important and customer paid travel happened. So when the Job of a car owing 25,000 a month software guy is affected, it affects the cab driver, the vegetable seller, the road side chai wala, and everybody else that depend on the buying power of this 25K a month guy. Its counter productive in an capital market to spend less, or in other words force to spend less.

So when you earn less, its an automatic increase in the cost of what you buy (meaning % spending on income).

Take this case, now the petrol in BLR > 80, the next weekend trip in my Honda City might be affected, meaning the coconut seller on the highway side, the kamat resturant, the mechanic who fixes a flat tyre (assuming it happens), Coca Cola etc will have one customer less. When you sum that up for many more such "petrol price" affected customers of the dependent economy, the earning over all reduce. Economy is a balance it can't tilt only one way. So I do not see how this will not affect the low income citizens.

Well, that is why govt spending (atleast in US) gets a boost when the economy goes flat! Capitalism,work that way, that is why the rupee is at 55, the crude at 90$ and still we get a 10% increase in Petrol!

By this logic, the hyper rich should be made more and more richer because it is because of the spending by that elite few that the rest of us exist. Guys who drive honda city on NH are like 0.001% of our population. The economy will continue as is, even if all NHC owners stop driving their cars

[pypkmsrikanth]

For those who talk "government should not be expected to pay for your fuel bill" government makes more than three times in petrol than in diesel in the form of taxes / duties.

It's a double whammy that petrol users pay high taxes plus market prices on the fuel.

The truth is petrol users are paying not only for themselves but for diesel users as well not to forget paying for all the welfare schemes which have leakages like a sieve.

[pratheekkunder]

Originally Posted by SAS

Sorry if I'm a bit too curt, but I find posts like yours very insensitive on petrol users. The question here is not just about petrol prices being increased but look at the bigger picture. How much diesel is actually used by farmers? Barely 13%. Rest is used by industry and public and private transportation. How much of LPG is used by the poor households? Just a fraction... If you are considering petrol as a "luxurious commodity", then why is aviation turbine fuel almost Rs. 15 cheaper than petrol per liter?? Why should the rich people be "subsidized" while poor commuters suffer?

The fact is that government needs to rationalize fuel prices, reduce subsidies on diesel and kerosene and remove it completely on LPG.

Petrol is not a luxury commodity. People use 2-wheelers extensively because the public transport is so shoddy. You're from Mumbai, you should be seeing this first hand.

A ridiculous fuel pricing policy only invites adulteration of expensive fuels while subsidized fuels are misused and wasted. Just take a look around on how many industrial establishments use diesel to power their gensets.

Personally I have a car running on CNG, hence my savings only increase as petrol prices increase. However I am also an avid biker and fuel prices are so irrational here in India that running my CNG Alto is now almost 20% cheaper than running my Yamaha SZ16. I can definitely feel the pain the average biker who does not have any other means of commuting shall go through :(

I completely agree with you. I tour a lot on my motorcycle. In fact, 12-13 % of my salary goes just for petrol every month.
What i wanted to say is, the subsidy allocation is completely wrong.
Before Liberalization,fuel supply were divided into 3 parts. Defense, Public and Private.
Those days fuel were subsidized only for Defense vehicles and administration. Later on as new Govt came, just to stick to their seats for a long time, the subsidized rates were slowly passed on to Public and then Private vehicles.
And now, it has been completely backfired.We can see the results.All, i want to say this the GOVT is responsible for this as there was a bad planning involved.

[wolf_lone]

Govt. should have reduced applicable taxes (central & state govt separately) to reduce the loss of Oil companies.

[MorePower]

Expectedly CMs of most states have demanded a rollback. Considering how 'strong willed' this govt has been on almost everything, wondering whether we will wake up to news of a rollback.

[quadbike]

I think I will convert my Swift to LPG ASAP. I do miss the left in the UPA alliance for all their crap they would not have allowed this to happen.

[punto_]

Well, while I am glad I've bought a Diesel car. I feel very sorry for the Petrol users!
Govt needs to remove the huge taxes on Petrol and pass the benefit for aam aadmi.
I' m sure Diesel and LPG will follow hike very soon.

[samarjitdhar]

I am amused with the amount of hike here. The last I had heard from the oil companies and the ministry was they were looking for a Rs 4 - Rs 5 hike. The government seems to have factored in that the Didis and Dadas will force a rollback hence a partial rollback is already factored in I guess.

Also during the past hikes, there was a hike of Rs X and then one had to add the taxes (central + state) ones to get to the exact retail prices in different states and cities. This time around it seems Rs 7.5 is being just added to the prices regardless of the taxes. So the government has done some weighted averaging of all the taxes in different states and arrived at this Rs 7.5 figure? Creative accounting and fictional formulas at work.

[k_nitin_r]

Originally Posted by scopriobharath

These gentlemen must commit that if rupee rises to 46/47, the hike would rolled back

There's a popular quote, which I believe is from Monkey Island or Protostar - "Inflation doesn't work the other way"

Originally Posted by Fiest@DuraTec

Here in Hyderabad it was 73.14 already. Now with 7.5 added and the VAT being the highest here... it would cross 80 for sure. What about Hyderabad?

In Hyderabad, the new price is just above 80.5. I'm not sure how much the VAT would add up to.

Originally Posted by svsantosh

My pulsar220 gives 35Kmpl. Dio gives 35Kmpl!

Add a sidecart to the Pulsar and you have something just as much seating space as the Nano - 2 on the bike and 1 in the sidecar would be more comfortable than 4 in a Nano because it will get cramped, esp. if one of the passengers is tall so practically, it is 3 in the Nano.

[wilful]

The Govt seems to put petrol (users) on par with cigarettes and booze. A subsidy yielding milch cow. I really wonder how wide would the gap be between petrol & diesel in the days to come? A fifty buck difference soon?