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Old 17th March 2020, 13:23   #61
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

Agreed that fuel is an essential commodity and all that stuff. But I simply don't agree to the fact that fuel prices should reduce below certain level. For God's sake, it is a highly polluting entity that is the cause of more than half the world's problems today. I would be even more happy if fuel is taxed a bit more and the cess collected goes to funding green energy sources.

I am amazed that fossil fuels are continuing to be sold today. The lobbying by the fuel companies owing to their financial clout gained from all these years is the reason for stunted development in non-fossil fuel powered energy sources. I am really sad that many members here are supporting a decrease in fuel prices so it becomes more 'affordable'. Whom are we kidding? And why should this source of green house gases get any cheaper?

I support all the additional tax that fossil fuels are subject to. And I am sure that the 'poor' people whom we are supposedly supporting will be least affected by the fuel price hike. They have worse things in life to worry about. And please! I am sure no one in Team BHP is so poor that they cannot afford a 3 Re hike on something that ought to have been banned long ago.

https://www.theguardian.com/business...es-says-report
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Old 17th March 2020, 13:39   #62
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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The guy with the 15Lac SUV happens to have paid a disproportionately (taxes change based on engine & vehicle size) larger tax than the person buying the tinbox that you have proposed. Again a tax that has gone to the Government coffers.

Is'nt this by choice Slick? We go into a purchase knowing fully well what the costs are.


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This is not about getting additional tax benefits. It's about the audacity of the Government to change the tax structure frequently to suit itself. Especially when fuel has been "so called" deregulated.

It's not a question of Rs300 but more about the principle.

The Govt. has been put in place by the people. Suiting itself is suiting the needs of the country's government! What does not suit the country is cheaper fuel leading to more demand, additional crude imports, increasing pollution..... there is NO positive outcome for India due to cheaper pump prices....nada, none! Private individulas may get some additional savings in their wallets but increasing fiscal deficit, falling rupee will hike up inflation due to increased fuel imports and hit the nation elsewhere!


Cheaper transportation costs must be courtesy of alternative sources, wether that is better quality public transportation like metros are new generation of buses or by cleaner electric/hybride personal transport.
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Old 17th March 2020, 13:47   #63
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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What does not suit the country is cheaper fuel leading to more demand, additional crude imports, increasing pollution..... there is NO positive outcome for India due to cheaper pump prices....nada, none!
Why not sell petrol for Rs 5000/litre then? Or even Rs 500000? Do all the benefits come at around Rs 80? Why?
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Old 17th March 2020, 13:51   #64
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

With fuel still not under GST umbrella, government adds excise duty & VAT on dealer commission. Every time global crude prices fall, the excise duty is increased, hence the consumer ends up paying almost the same as earlier or a little less.

Excise duty is almost equal to the base price, add to that dealer commission, freight & VAT, you get what we pay.

Edit: The excise duty collected helps in reducing the Current Account/Trade deficit of the nation.

Last edited by Venkat_Figo : 17th March 2020 at 13:54.
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Old 17th March 2020, 13:56   #65
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

The (sl)eaziest thing a politician can do is to sell fish to wolves.

The ones who force carrots down wolves throats because of certain compulsions have obviously bit the bullet and are willing to face the heat eventually so that their immediate objectives are met. And they're up there in their ivory towers while we're down here, fangs bared, paws swiping and howling away into the night.
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Old 17th March 2020, 13:56   #66
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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Originally Posted by shortbread View Post

The Govt. has been put in place by the people. Suiting itself is suiting the needs of the country's government! What does not suit the country is cheaper fuel leading to more demand, additional crude imports, increasing pollution..... there is NO positive outcome for India due to cheaper pump prices....nada, none! Private individulas may get some additional savings in their wallets but increasing fiscal deficit, falling rupee will hike up inflation due to increased fuel imports and hit the nation elsewhere!
By this logic any tax increase has to be celebrated as the next step towards development. Why claim exemption in income tax as we are denying the country a chance to develop?


What you state is correct but that is if I am asking for a discount. I am not. I am simply saying keep the taxes as they are (130% +). The Government is earning 2lac crores or thereabouts every year. The argument is over and above that. If the reduced price causes their % tax to reduce they should be able to stomach that. I am sure they have a team forecasting that.


About the development, unfortunately that is not how it rolls. Increased taxes do not guarantee better infrastructure. That depends upon the calibre of the people in the hot seat. Our forum rules do not permit beyond this.


Quote:
Cheaper transportation costs must be courtesy of alternative sources, wether that is better quality public transportation like metros are new generation of buses or by cleaner electric/hybride personal transport
Public transportation in a populous country like India is always going to be hit or miss for the next few years. The metro would address it to a large extent but it is yet to be delivered in other large cities in India except Delhi.
Mumbai being next in line.

- Slick
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Old 17th March 2020, 14:03   #67
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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Why not sell petrol for Rs 5000/litre then? Or even Rs 500000? Do all the benefits come at around Rs 80? Why?
You do realize that international oil prices , just like the price of gold , $$ /INR exchange rate etc, is demand and supply right?. There is a quoted rate and if there is enough demand, the quoted rate keeps going higher and higher and the reverse is also true. If the quoted rate is higher and demand is not there , the seller has to reduce the price. Right now , the OPEC and Russia are having a geo political war and saudis is dumping oil into the market causing a glut resulting in a fall of the crude prices. This would adversely affect the russian economy which is heavily oil dependent.

At the rate which you mentioned, i would rather ride my bicycle.

Last edited by srini1785 : 17th March 2020 at 14:33.
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Old 17th March 2020, 14:03   #68
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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Originally Posted by Slick View Post

Public transportation in a populous country like India is always going to be hit or miss for the next few years. The metro would address it to a large extent but it is yet to be delivered in other large cities in India except Delhi.
Mumbai being next in line.

- Slick

Delivered in more than a dozen cities and plenty more in the pipeline.
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Old 17th March 2020, 14:06   #69
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

The last bit about Israeli politics can be skipped.


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Old 17th March 2020, 14:12   #70
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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Originally Posted by Slick View Post
If the reduced price causes their % tax to reduce they should be able to stomach that. I am sure they have a team forecasting that.
Fun fact: The excise duty levied by the central government is a fixed amount per litre and not a %. So whatever increase they have made is purely a windfall gain. I am very curious to wait and see what they are going to do with the estimated 40 thousand crore rupee gain.

On the other hand, state governments charge on a percentage basis and any decrease in price will have an impact on their top line.
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Old 17th March 2020, 14:12   #71
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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Originally Posted by shortbread View Post
What does not suit the country is cheaper fuel leading to more demand, additional crude imports, increasing pollution..... there is NO positive outcome for India due to cheaper pump prices....nada, none!
Is there an officially published statistic that proves that the pattern for the same economy, over short term or medium term, has seen a spike in fuel consumption (demand, as you put it), due to falling "pump prices" when most other retail commodity consumption has not? Or is it a convenient make believe just like, say, "good-dayism" or the "national pride" or "cashless economy" .... If it is just your personal opinion, that is a different matter.

Last edited by lapis_lazuli : 17th March 2020 at 14:26.
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Old 17th March 2020, 14:27   #72
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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Originally Posted by lapis_lazuli View Post
Is there an officially published statistic that proves that the pattern for the same economy, over short term or medium term, has seen a spike in fuel consumption (demand, as you put it), due to falling "pump prices" when all other retail commodity consumption has not? Or is it a convenient make believe just like, say, "good-dayism" or the "national pride" or "cashless economy" ....

A convinient fact is that the daily consumption has increased from 3,900 barrels a day in 2014 to 5000+ currently. All of which are imports, despite the 'unaffordable' taxes and duties! Makes one wonder if the prices are this unaffordable, who exactly is driving this increasing thirst for imported crude?
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Old 17th March 2020, 14:34   #73
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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A convinient fact is that the daily consumption has increased from 3,900 barrels a day in 2014 to 5000+ currently. All of which are imports, despite the 'unaffordable' taxes and duties! Makes one wonder if the prices are this unaffordable, who exactly is driving this increasing thirst for imported crude?
But the price of the barrel has reduced from USD140 ish in 2014 to like, what, now, in 2020? Starting 2016?? Even a running average, over the last 5 years? We want growth, brag about it, but no increase in mobility fuel consumption. Well, well!

This is precisely my point...consumption is not luxury(want) driven but necessity(need) driven in a country like India! So, lesser price implying more than usual consumption, just because I can buy more for the same money, nada...! I wouldnt do the golden quadrilateral twice over in a year because petrol is 60. My maid could buy a couple of bananas more for her child though, with this 10 rupees saving a day, theoretically speaking.

Last edited by lapis_lazuli : 17th March 2020 at 14:54.
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Old 17th March 2020, 14:35   #74
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

Most Govt's by nature make inefficient use of financial receipts and are always short of cash. This is as much with the Indian Govt as it is with say the U.S. Govt*. Each will do the best it can to pull receipts out of the economy be it rigid taxes, not passing on price drops in international commodities or indulging in legal but extortionist methods on tax vis-a-vis businesses.

We can have either of two systems where oil prices go - free floating where the price resets periodically ie each month or week reflecting the international price for crude oil. In that case, which most of us Indians frankly are not culturally equipped to handle, the price could by Rs 20/litre one month, Rs 50/litre in another and Rs 100/litre in a third. The Govt's in India from both sides of the political divide have chosen to keep prices stable when they vary a bit up or down, keep the money in Govt's pockets when they drop (remember every drop is temporary) and increase it when it sees a semi-permanent move up in prices. The current drop in price is driven by geo-politics and not be any fundamental shift in market forces, demand or technology break through. It would not be practical, in a country like India, to drop prices for 10 weeks to Rs 40/litre and then raise them back when prices re-stabilize at more commercially normal levels.

While I am no advocate for inefficiency in Govt spending it does not make sense for petroleum products to be reduced in what is an international price war of political egos.

*Germany, South Korea, Sweden, Netherlands are the few exceptions
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Old 17th March 2020, 15:49   #75
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Default Re: Crude oil prices crash, but India refuses to slash fuel prices

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... I am very curious to wait and see what they are going to do with the estimated 40 thousand crore rupee gain.
I can answer this partly
Central government hikes DA for employees & pensioners, additional burden of 14,595 crore

https://m.economictimes.com/wealth/p...w/74614968.cms
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