[chennai-indian]

This demand is useless. What we should have is uniform taxation across states and allow the oil marketing companies to set prices based on cost of transportation etc - like in the US. In US, I have seen prices differing even between 2 petrol stations next to each other.

[arnabchak]

May not be a realistic case in the near future.

Union Territories like Daman/Diu/Silvassa for example have significantly lower fuel prices.Compare a Silvassa rate to Mumbai and on any given day the difference is upwards of Rs. 5 per lt.

It therefore may be a no go from the citizens staying in areas where the prices are lower. Also, high touring vehicles will lose the option of refuelling at states where the prices are cheaper.

[centaur]

Originally Posted by drmohitg

Not true. Delhi is far off from any port and yet prices are among the lowest. Compared to that states with access to ports like Gujarat and Maharashtra have higher prices.

That is because its the national capital and a UT and taxes are lower in a UT IIRC. Same is the case for most other UT's also I believe

[landcruiser123]

A lot of things like transportation costs, local taxes etc won't let such a thing happen.

Also, what fraction of pump owners have asked for this change? I'm sure those in TN around Hosur will oppose this. I know from personal experience that a lot of people(including me) traveling from Bangalore to TN would fill there.

[sgiitk]

Originally Posted by hillsnrains

The revenue of the petrol pumps in state border drops significantly as much as 40%. For example diesel in Andhra pumps is costlier by ~2.5 rupees more than Karnataka (This difference was ~4.5 rupees a while back, thanks to weird local state tax structure)

Happens the world over. At one time (I guess it still is) taxation on Fuel in Luxembourg was far lower than in Belgium. There was a street on which one side was Lux and One Be. All gas stations were on one side!

[scopriobharath]

Originally Posted by landcruiser123

A lot of things like transportation costs, local taxes etc won't let such a thing happen.

Also, what fraction of pump owners have asked for this change? I'm sure those in TN around Hosur will oppose this. I know from personal experience that a lot of people(including me) traveling from Bangalore to TN would fill there.

It is bound to happen. The places with lesser prices will adjust themselves to higher priced cities where cost is more. I don't think why pump owners would'nt agree to this.

[sudeep.pandya]

Originally Posted by asr245

Why does the petrol pump owner association even care about this? Aren't there incomes fixed irrespective of the price? Or is just the owners who are close to state borders who are demanding this?
.

No doubt the bunks located near the state borders are most affected. The bunk located in a cheaper state will sell more and vice versa.

Originally Posted by asr245

Yes, i am quite aware of this practice, but it seems only a small percentage of petrol pump owners are affected by this, whereas a large percentage of population (states where these are cheaper) will be affected by these being priced same all over.

Trust me, the chunk is not small. The transporters who operate on long routes always prefer the cheaper state for refuelling even if the difference is in paisas.

The real 'volume' comes from the commercial activities and not the private car users.

Originally Posted by CarJunki

This is nothing but an effort to increase the fuel prices all over the country to same levels and make better commission for petroleum dealers.


And yes, there are some dealers who operate (voluntarily) at lower margin than a neighboring dealer for the lure of higher business volume and overall higher profits.

How this will translate to a better commission? Please elaborate.

The retail selling price is provided by the company and one has to sell at the given price. The difference witnessed generally involves logistics and company margins. Usually the cheapest - costliest is in the following order -

Reliance < HP < IOC < BP (The difference usually stays in a limit of 30 paise)

Reliance always takes the price of the nearest PSU pump and set the RSP (Retail selling price) lower than the immediate competitor.

[landcruiser123]

Originally Posted by scopriobharath

The places with lesser prices will adjust themselves to higher priced cities where cost is more.

Why would an pump owner in Hosur agree to this? It would bring down his sales.

There are so many cars, buses and trucks from Bangalore or passing via Bangalore and going through Hosur everyday. Most drivers know that fuel is cheaper in Hosur.

I remember seeing a price difference in diesel of upto INR 2 per litre. With a 50 litter tank, the difference in price is INR 100. So, filling at Hosur instead of Bangalore could buy you a coffee and snacks.

[Rahul Bhalgat]

What price to sell fuel is up to the oil companies and what taxes to charge is up to the Govt. IMO, the pump owners have no business and no position to ask for uniform fuel price as long as they are getting their margin per liter.

Can anyone explain the possible real reason behind this demand?

[sgiitk]

Originally Posted by Rahul Bhalgat

What price to sell fuel is up to the oil companies and what taxes to charge is up to the Govt. IMO, the pump owners have no business and no position to ask for uniform fuel price as long as they are getting their margin per liter.

Technically you are correct, but it does impact business esp near state borders. Many years ago we were driving from Manipal to Munnar. The tank was getting a bit low, so I wanted to tank up after Mangalore. Did not spot any until we were in Kerala, why Petrol in Kerala was significantly cheaper. Try to find a pump on the Karwar-Panaji highway as you approach Goa!