[Equus]

Who pays for the COVID-19 costs? One of that someone/something is fuel! There could be more, many more.

No matter what the price of oil per barrel, I get the feeling that GOI has made up their mind to keep the prices around 60-65 and 70-75 respectively. Which is not bad as we are used to this now. If this can help fund other important stuff (proactive like infrastructure or reactive like COVID), its okay. Also if fuel prices rise substantially tomm, we dont go very high either (under 75 and 85 respectively).

[GTO]

Mod Note: Just a friendly reminder of our rules, guys. No discussion on politics or politicians please!

[sunnsood]

Originally Posted by Equus

Who pays for the COVID-19 costs? One of that someone/something is fuel! There could be more, many more.

No matter what the price of oil per barrel, I get the feeling that GOI has made up their mind to keep the prices around 60-65 and 70-75 respectively. Which is not bad as we are used to this now. If this can help fund other important stuff (proactive like infrastructure or reactive like COVID), its okay. Also if fuel prices rise substantially tomm, we dont go very high either (under 75 and 85 respectively).

If one lives in Delhi NCR region and every year his/her lungs have to bear the burnt of severe pollution, should we do nothing and say delhi ncr is used to it?

[drmohitg]

Originally Posted by sunnsood

If one lives in Delhi NCR region and every year his/her lungs have to bear the burnt of severe pollution, should we do nothing and say delhi ncr is used to it?

What has this got to do with the fuel hike? Did not follow what you are trying to say. The government is not doing anything significant to curb down the pollution levels. Year after year it is the same story. Summers have come and will go. And then we will again be facing those same campaigns telling us to avoid going out, burning crackers and the 15 day odd-even fiasco in the name of addressing the problem.

[vharihar]

Originally Posted by landcruiser123

Well, no surprise at all. While I'm not against collecting taxes, I'm concerned about how they are spent.

Take a look at the zillion infra works discussed at (dedicated thread for each specific project):

https://www.skyscrapercity.com/forumdisplay.php?f=1253

https://www.skyscrapercity.com/forumdisplay.php?f=1251

Where do you think the money for these works comes from? Thats where our taxes go. So lets not talk like our taxes are always going down the drain.

City roads are a mess, yes, but that comes under municipal corporations. They are a den of corruption. But the fuel and income taxes we pay to state and central govt go on to fund projects by NHAI, Railways, metro works, etc. And there are very many infrastructure works happening there and progressing very fast and very fruitfully.

Intra-city roads are a mess, but inter-city roads are improving. I urge you to go thru the several threads in the URL links I shared, they're complete with pics and videos incl drone videos.

These URL links are manned by generic infra-nerds who closely track things getting built, its not manned by politically-leaning people. These are the class of people like railfans, etc who will bear the hot sun and stand in an isolated spot for hours and grab pics and videos of ongoing works far out in the hinterland.

Coming back to the taxes on fuel:
The economy is in a mess (and you could blame the present govt to some extent for it, but not all; many of them are due to structural issues in our economy which needed correction, and this was inevitable). As a result, tax revenues are also faltering. There is a need for some means for the govt to shore up tax revenues in order to continue the ongoing infra, etc works. Hence, I don't mind and am not surprised by the excise hike on fuel.

[Stribog]

Originally Posted by nisshith

While all your points are correct, but I do not agree with the fact that the common man is not affected by the excise duty increase. Sure they are not affected now as the fuel prices are the same even after the excise duty increase.

But this COVID situation is temporary the global economy will bounce back in a year or so and the crude oil prices will sharply go up again. At that time prices of all of the things (public transport, common commodities, vegetables, etc) will increase sharply. For the 2% people who own the cars will not be affected that much as they will see their salary increase in same proportion, but not the poor and middle class. They will find it harder to meet their requirements, even if they are earning more than before (as their salary will not increase in similar proportion). This is what creates are pay parity and increases the gap between the poor and rich people, it has been like this for ages. Crude oil is a very essential commodity and it plays a very important role for everyone even if they are not direct consumers. Governments use it as a tool to decrease the fiscal deficit and forget about the long term effects it brings to people's lives.

Mods am leaving in the full quote here as the OP makes multiple good points and truncating the post will mean the reply might not even make sense.

Am not saying it is only the 2% who are affected, or the 14% (including 2 wheeler owners), fuel prices affect all however the effect is disproportionate only on this 2% with a lesser impact on the 14%. Outside of these groups the effect is minimal and I include both fuel pump usage individually as well as WPI inflation of which basket fuel only forms some 15%.

My point is, to the real 'average Indian' or in other words fully 85% of the pop, petrol pump prices are an esoteric number.

Originally Posted by kiku007

Crude oil prices crashed and the Government increased excise duty.

So I guess this is how it looks based on some of the ridiculous explanations supporting this practice,

Ah yes, saying increased fuel duties funding infrastructure, infrastructure a growing country like India needs YESTERDAY is both 'ridiculous' and 'nationalistic'.

Who cares about infra when we could have fuel prices at half price for a few months or year. We can always drive our fancy cars (oh poor middle class Indian driving a 15L+ car in a country with a per capita ANNUAL income of Rs 140,000. The real 'average Indian' would need 5 years full income to buy an entry level hatchback and run it.

And that is per capita income, skewed by the Ambani's of the world, median income in India is approx $ 800! What an average Team BHP'ian drops on a session of detailing is the entire income the average Indian earns.

It is ridiculous I guess to want basic road, power, sanitation infra, but then again let the poor eat cake or whatever while we enjoy lower fuel prices (temporarily)

Originally Posted by abhinavinc

Not to be derogtory to folks back in India, but petrol prices here in Toronto are at their lowest since i moved here in 2015. I filled up 44 litres of petrol yesterday in my Corolla for approx $34. That come to nearly Rs.40 per litre!

In my opinion, the current increase in taxes on fuel is definitely not warranted in India no matter the excuse, as fuel is already taxed enough. .

And on what basis do you say it is not 'warranted'? Simple question, does or does not India need infra....if your answer is no to this, then there is no point in this discussion but if your answer is yes, then this is one channel of funding said infra development.

I don't expect a Canadian national to understand the serious lack of infra in both urban and rural India, let along things like ports, airports and power sectors all of which need approx $ 1.5 tn in the next 5 years, but as an Indian residing in India, and who has 3 cars + 2 bikes, I will happily pay up both this price and even increased prices if the govt so desires it as I personally see it as helping the real average Indian. And I am govt / party agnostic here, I did this in 2013 and would do it tomorrow no matter who the PM is.

Originally Posted by stanjohn123

It's ok for developed countries to price fuel higher because their average incomes are much higher than a poor country like our's.

Also considering that our economy has been struggling for the past quarters, wouldn't it be prudent to increase public spending by letting people have some money in hand through fuel saving's ?


You might have started falling for the hype created by this govt that India is paradise, but the real truth is different. This govt has mismanaged all the funds it got in terms of huge windfall in lower crude oil prices during it first term in power. They squandered it all on their publicity campaigns, statues and their own buildings. In short although they spent on certain infrastructure projects like roads, they equally squandered our money on unnecessary things.

They are a monumental disaster when it comes to managing our economy. Case in point Demonetization.

So rather than attacking a person who just said the truth about our country. Let's try to use it constructively to hold this government accountable so that they bring about a positive change.

I don't think this govt is painting any picture of India as any paradise, and let us keep politics out of the forum please. On topic though, dropping fuel costs will have a disastrous effect on our deficit AND impact our infra building plans.

As I have asked another forum member, do you think India needs infra or no. Simple question, the answer to that should answer this topic.

[nagr22]

Wonderful points by Stribog and I fully support them. My only expectation is that the government really uses the additional tax collected to fund the projects that help a common Indian in a transparent manner. I would be happy if lets say they even collect 10Rs per litre on petrol as infrastructure fund (works out almost 1Re per km if a car gives 10kmpl, which is comparable to the toll we pay on highways) and provide good infrastructure to everyone. This where our governments let us down and it doesn't matter whose government!

[dark.knight]

I think we can all agree that the government is no NGO (duh, right?), since NGO itself stands for Non Governmental Organization or its other form NPO i.e Non Profit Organization.

Now that, that is established, let us just come out and say the obvious, something we keep hesitating to say, from fear of getting lynched by the general public - the government (all of then, worldwide, irrespective of parties) are profit making business organizations.. yes, PROFIT.

With great respect to the law and order department, defence department, education departments, planning and development department and human/animal welfare departments, I still say that no matter what they spend for the good, be it most obvious expenditures like construction, schools, courts, metros, roads, water and sewerage, electric lines etc, to the lesser known like welfare schemes, free or subsidized schooling, free meal schemes, scholarships, etc to the underground expenditures like kickbacks to the public for votes, free liquor, bribes and commissions to get activities kickstarted, etc, they STILL make one mean profit after all of that, and why wont they? Their profit is their motivation, how many zeroes should that profit contain? Now we're at the billion dollar question.

Fuel is obviously one of the easiest earnings for the government, every vehicular movement relies on it, it is deemed only for the "ultra mega hyper rich" in layman speak, and hence it neednt require price regulation as much as say, LPG which everyone requires as its a matter of food. As much as I'd like to protest this rampant hiking of prices, with no reduction during the global price fall, only to pick up at the same high price to make it higher when global prices rise again.. its a famous trick to increase profitability, and YES I say it again.. the government is one big corporate machinery with law and defence on its side, alongwith much love and adoration from their aam aadmi, why would anyone not exploit that?

The only peaceful protest you can do, and this is a weapon the government dreads - reduce demand to an extent you're comfortable with, and carry on with your life without the endless debate on how to make life fair, that's like asking how to keep the toilet bowl spotless clean.

Preferably, we shouldn't vote either (I'll be lynched for this), but in the end its all up to you, either continue in this cesspool in full acceptance, irrespective of political party or governmental regulations, or keep things simple and strictly on requirement basis so that a) you have more money left with you and b) government can earn less from you with fuel/commodity taxes. Be aware though that the government has 2 massive weapons with them that can reset everything - banks and inflation.

[Stribog]

Originally Posted by nagr22

Wonderful points by Stribog and I fully support them. My only expectation is that the government really uses the additional tax collected to fund the projects that help a common Indian in a transparent manner.

Originally Posted by dark.knight

I think we can all agree that the government is no NGO (duh, right?), since NGO itself stands for Non Governmental Organization or its other form NPO i.e Non Profit Organization.

This is needlessly pessimistic and cynical by dark knight imo.

Some numbers

In 1947 - India had a 12% literacy rate, and 70% of its population lived in poverty (all thanks to our British masters). Infra we had none except railways, even this was restricted to resource nodal points and linked ports to to these and the odd city / major population centre. Everything from food to cement was imported (we had only 3 cement plants in India in 1947). Roads were non existent outside of major cities.

Compare it to the India of today and you will see a gigantic difference in infra, quality of living, people living in poverty and pretty much every metric.

In 1947 India was the poorest nation on earth, today we are pulling the most people out of poverty every day (and second highest in all human history after China).

Make no mistake, India is still terribly poor but we now have something we lost in 1800, geopolitical heft and we also have growth (and am not restricting myself to any party here, starting 1990 we have been in the top 5 fastest growing large economies in the world and still remain there).

So no, I don't think it is all doom and gloom as you project it and I say this as someone who chose to come back to India.

[ramzsys]

What are we going to do with reduced fuel prices, anyway?

Use all of that 140 kmph capable 100+ horses to inch ahead in the great Indian urban crawl while also carefully wading through the ever increasing swarms of HF deluxe and CT100s, otherwise risk the passive aggressive working class' fury turn into a full blown road rage?

Mind you, it's no longer 'save up everything' but 'live the moment' that governs the working class now; with ultra cheap fuel the 100cc would get doubled and imagine the atrocities they would unleash on traffic mannerisms with the current pathetic urban infrastructure.

Go ahead and look at the number of cars Vs bikes sold in this country to understand what I am implying. With such a population density, anything that encourages private vehicle ownership is NOT the way forward.

--

Now let me share my perspective about why the government (irrespective of who is in power) is always in a "more soup, Fagin sir'' mode. It's the population. Overpopulation to be specific.

This is a democracy they say which means a carefully thought out vote of an educated citizen made in the common welfare would easily be nullified by one rural 'ignorance is bliss' laborer. So what do you think the politician would do?

Would he work all round the year to develop infrastructure according to your long list of carefully thought out points, or to spend one sleepless night before the voting day to push a freshly minted rupee note and spend the rest to buy crackers to celebrate the victory?

The urban voter is lazy to go out to vote anyway - can't squander a holiday on a 'pointless exercise' while the latter, thanks to the fresh note (which is gone to buy booze or his wife's gold) ensures that he exercises his right duly. The former demands 'i earn, i pay taxes, why ain't i getting it back'. It's all going to the vast population in the form of candy to a vastly diabetic rural population that thrives on religion, caste and such social dramas.

Vote bank schemes like NREGS - the supporters of such scheme says 'a lot of rural infrastructure is built' but take a sunday off to visit your rural - it still looks the same way in the eastman color movies. But any government that dares to touch it would ensure that it will be called 'suite boot sarkar' - remember how the 'India shining' campaign utterly failed because it completely ignored the rural voters. The balancing act is tough.

Too much democratic noise is ensuring that we are kept on the path of a failing economy: if we aren't capitalizing on our demographic dividend before 2035, we are done. It's ridiculous to see people cribbing about fuel prices while remaining apathetic to vital aspects like government policy and spending.

Much respects for China - for how they managed to transform into a manufacturing nation through the decades and of late for containing the virus, comparing to how rest of the world is doing.

[ninjatalli]

All the folks crying out that this price move (or rather non-movement due to crude price drop) has genuine and necessary purpose - for infrastructure, tax deficit, and what-not; why not pay extra for each liter of petrol; you'll be doing a service in-line with your current views; and pay for the difference a fellow bhpian feels a price drop would cater to; after all it's for the greater good

And this discussion could end amicably - I see equal number of folks on either side; so a one-on-one bhpian mapping can be done within the forum and you'd be justifying the views you so clearly are arguing for! So if any bhpian wants to pay the delta costs for my petrol bills, please let me know (we can agree on what could be the drop-in-price INR value through PMs)

Btw transparency is the ball-game here. If infrastructure requires monetary infusion, there are PPP/private-org based models to drive that (which is the case for most if not all infrastructure investments). You pay for fuel, the value should be linked to the sourcing, refining and related costs only. The government machine is not a single honey pot where every rupee goes in and every rupee comes out; and this is for proper reason.

[Slick]

Originally Posted by mvadg

Coming to the topic, whatever happened to all that excise collection from the era of low oil prices? I don't see any benefits - can someone point me to the information that documents what exactly was done with the huge revenue (how much exactly) and which projects benefited? Where should I look to see who and what benefited?

Roughly 2Lac crores per anum, of course it would have been different every year subject to changes in crude oil prices.

Originally Posted by DarthVeda

Whether it is the current ruling party (NDA) or the one sitting on the other side (UPA), all will always hike the tax on fuel. I remember BJP in karnataka crying loudly when previous goverment hiked tax, and now they did the same in the budget. Center also doing the same, doesn't surprise, what these parties should do is shut up about it.

Meanwhile, I wonder how it will affect me while I ride my Ather 450 around for my daily commute

While I don't want to get into party vs party,
I remember earlier govt. gave fuel subsidy when crude oil prices exceeded 120$/barrel.

Originally Posted by kiku007

2017



2019

Crude oil prices crashed and the Government increased excise duty.

So I guess this is how it looks based on some of the ridiculous explanations supporting this practice,
Cost of Petrol/Diesel in India: About 60% of the cost is for nation-building and the remaining consists of other smaller elements that include what people call as crude oil.

Also, people shouldn't complain because this nation-building tax is paid only by 2% of Indians?

This is a cruel joke. I really feel bad for the sensible Indian.

Agreed.

Originally Posted by Stribog

Mods am leaving in the full quote here as the OP makes multiple good points and truncating the post will mean the reply might not even make sense.

Am not saying it is only the 2% who are affected, or the 14% (including 2 wheeler owners), fuel prices affect all however the effect is disproportionate only on this 2% with a lesser impact on the 14%. Outside of these groups the effect is minimal and I include both fuel pump usage individually as well as WPI inflation of which basket fuel only forms some 15%.

My point is, to the real 'average Indian' or in other words fully 85% of the pop, petrol pump prices are an esoteric number.



Ah yes, saying increased fuel duties funding infrastructure, infrastructure a growing country like India needs YESTERDAY is both 'ridiculous' and 'nationalistic'.

Who cares about infra when we could have fuel prices at half price for a few months or year.We can always drive our fancy cars (oh poor middle class Indian driving a 15L+ car in a country with a per capita ANNUAL income of Rs 140,000. The real 'average Indian' would need 5 years full income to buy an entry level hatchback and run it.

Absolutely don't agree with this line of thinking.

The government is already earning a hell lot more from fuel and other cess than the last Government.
They are taxing us in excess of 130% as mentioned earlier in the thread.

A car owner hoping for respite on fuel prices (these price drops have been promised in the first place when they deregulated it) has to now face the shame of being selfish and counter productive to nation building?

Just because someone is earning enough to buy 15L car, he has to be quiet when the Government tries to get that extra from his pocket?


The Government needs to plan & manage it's finances better. Irrespective of which political party they belong to if a government starts increasing taxes and it pinches my pocket, I am going to complain.

We are not asking for petrol @ INR35/litre. The criticism is that with fuel prices dropping we should get the benefit under the existing tax structure.


- Slick

[shortbread]

Originally Posted by Slick

Just because someone is earning enough to buy 15L car, he has to be quiet when the Government tries to get that extra from his pocket?

- Slick

He shouldn't be quiet, must run to the nearest showroom, make noise and demand for a small car with even smaller running costs. Albeit something safe.

In a country where buying a Maruti tin box is aspirational for many, who exactly is misguided - the Govt OR people concerned about missing out on a rs. 300 saving when topping up their SUVs & Bullets with full tank of fuel?

Taxing carbon to the hilt is critical for India's ecology and economy.

[WhiteKnight]

Originally Posted by shortbread

When was the last time a means of transport reduced it's fares because oil prices fell?

Majority of the poorer populace rely on public transportation. None of these firms, govt. or private are willing to reduce fares because their fuel costs have fallen. A family of 3 taking an auto-rickshaw still pays the same fare, or a daily wager catching a bus to work! SO who exactly benefits?

First of all, I mentioned transportation cost. It applies to the transport service provider as well as the customer. You are referring to only customer.
At the moment, my primary focus would be on transport service providers. If they find the business not sustainable, and start folding, it will hit the entire supply chain, and will hit our ability to stay afloat during the current crisis. just look at what would happen to airline industry, for example.
Currently, the "poor" people are not using public transport NOT due to the fact they are expensive, but due to the virus lockdown. Immediate question would be how to we keep the logistics and transport running, so that we keep ticking.

As a side note, if the government wants, they can reduce the pricing for any transport service. When it was last done etc are irrelevant. Again, this is not the right time.

Originally Posted by shortbread

Secondly the country has to cap it's consumption of imported crude, increase in demand due to lower prices has a negative effect on the India's economy.

Again, the cap was done for a purpose, and it is not irreversible. More importantly, reduction in fuel prices will never have proportional (please note this) increase in consumption. That is because people mostly travel for a purpose, not for leisure all the time. To make it simple, Mr X travels from home to office every day. Now that we reduce fuel price, Mr X is neither going to take a longer route nor going to travel to somewhere else, every day.

Originally Posted by shortbread

The government has to look at alternative energy sources for transportation on a war footing. This is the only solution, not cheaper hydrocarbons.

We're in a crisis, this is not the time to look for alternate energy sources. Our objective should be oriented to how do we keep the people fed for next two months, to sail over Corona virus.

[Slick]

Originally Posted by shortbread

He shouldn't be quiet, must run to the nearest showroom, make noise and demand for a small car with even smaller running costs. Albeit something safe.

In a country where buying a Maruti tin box is aspirational for many, who exactly is misguided - the Govt OR people concerned about missing out on a rs. 300 saving when topping up their SUVs & Bullets with full tank of fuel?

Taxing carbon to the hilt is critical for India's ecology and economy.

Please read this reply again, this statement is weird at best.
You say people who are complaining about the fuel taxation should change their vehicles?

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.

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.

I am working from home so my running is almost nil. That said some posts supporting the tax change amaze me. We seem to be celebrating taxes, above 130%.


- Slick