[locusjag]

Originally Posted by norhog

The majority here are sad with the hike and understandably so.
We all love cars and bikes here and are enthusiasts.

But from a broader perspective, just take a step back and think. It is not so bad. This will save unnecessary travel with the options available for doing most things on line.
I think this is a move to push the middle class more and more towards public transport.

Most cities in India now have METRO railways. Either fully functioning or soon to start. This will definitely make the middle class person use public transport for regular transportation and private vehicles only for occasions.

Also as this lockdown has shown, a vast majority of white collar working force, across the industry spectrum can get most work done from home by using various online platforms, there is simply no need to travel regularly to "place of work".
So with good public transport in cities and metropolitan areas and walk/cycle to work and work from home, this price rise should be OK.

This was personal transportation. Now economics of the household.
Money saved from regular personal transport, by way of work from home and using public transport, basically NOT using private transport, some percentage of it can be used to absorb cost of increase in grocery and food price, owing to increased transport cost.

So in the NET SUM game, it won't be so bad as it is being made out to be.

Also, as our country, INDIA, becomes more affluent and number of middle class persons increase in the population, we do not have the infrastructure to absorb so many private vehicles. Getting people used to public transport at middle class levels will surely help.
If you look at Asian cities like Tokyo, Singapore, vast majority, even presidents and CEOs, use public transport for daily transportation, even though they have nice cars parked in their garages for occasional use for a trip to golf course or out of town.

I feel terrible for the brow-beating you've taken here norhog. Thought-crimes shouldn't be a thing. I mean, you have a right to a cogent opinion as much as any other person here. I feel personally horrified at how aspersions have been cast upon you in this thread. You have been rudely shamed and silenced - all because you have an opinion! That's shameful.

Sometimes, people fail to notice how they behave online. Look, I've also said some insensitive things on the forum and regret it to this day...I am sure our fellow members didn't mean any harm and they are auto enthusiasts; of course they get overtly upset over fuel prices!

When the first drop of blood hits the sea water, people usually clamber up onto their boats. But you stayed underwater to explain the benefits of a vegan diet to a full blown shark feeding frenzy. I would advocate to simply clamber onto a boat and to watch the frenzy unfold from up top. You can even have a vegan snack while you're at it!

Do not let this thread ruin your mood or your state of mind even for a moment. Your opinions and feelings certainly matter. You matter to your family, friends and to this forum. You've been a long-standing member since 2006 (that's 15 years!!) and I hope this thread doesn't ruin your enthusiasm towards the forum.

PS: I could have easily sent this as a PM to you. But when it is the civilized custom to praise in public and to reprimand in private, I wanted to at least display my support for you in public after what they've done to you.

[SN88]

Originally Posted by norhog

Not at all. People who need to go on site must be compensated by their employers, by way of travel allowance, petrol bill for their private transport or send a office car/van for pick up and drop. We can find ways.

.

In all honesty, I would love to use public transport for work, casual outing's etc and I appreciate your optimism BUT as you said we can find ways is not convincing as I dont see the govt even trying to find ways except burden its people.
What I genuinely feel is that the good intentions ( if true ) of the policy makers is not collaborating with their actions.

Where are the alternates or better transport options that will make me optimistic about rising fuel prices? Believe me brother people will use public transport for convenience irrespective of fuel prices whether low or high as long as it is easy and well scaled for large cities. That is what I have seen in Hong Kong personally.

[condor]

Originally Posted by norhog

The majority here are sad with the hike and understandably so.
We all love cars and bikes here and are enthusiasts..

@Norhog, thank you. One of the few logical, sane thoughts in all these threads that are discussing the high fuel prices.

I have posted earlier in other threads, but considering the majority views in these threads, I feel best to stay out of this cacophony.
(I know people are going to come at me for this above line)


Mods, I am making a back-to-back post here, but pls bear with me. Thanks

Fuel prices are a favorite bashing point amongst TBHP members, and in other places too. We all want fair prices, and I am one too. However, things are not all that simple and in no way can be separate by itself from all other aspects of things - from taxation or personal expenditure.

Like @Norhog has said, the net sum of outgo for a person even with the current high prices, even considering inflation, is not that much. Over the years we have seen some prices go up, some down, our salaries are higher (for most), and we are actually able to manage the increased prices.

I want to share another point.

People are talking today of the increasing prices of petrol & diesel. An oft used comparison is the levels upto 2014, vs now. Yes, prices were lower back then.

However:
Upto May 2014, fuel prices were regulated by government. No matter what the international prices of crude, the price was set, and increased twice a month by 50 paise. No one felt the pinch. Many people used to fill just before that 50 ps hike too.

So if price was increased on 1st of month, Next hike on 15th. Crude prices kept increasing in between, and the oil companies suffered losses due to both - the regulated price and not being able to pass on the increases in this interim 15 days.

The losses kept increasing so much that the government of that day issued oil bonds to the oil companies. Details in the table below.

These oil bonds will finally mature in 2026.



If anyone views all this a little deeper, it can be seen that - for the lower, unregulated prices we paid back then, we are actually still paying for that even now. We have paid for that over the past 7 years, and we will continue to pay for the next 5 years.

The amount of money we are paying over these years comes close to 2.5 lakh crore when we include the bond value, the interests, and the amount that was pending to Iran.

In later half of 2014, the prices were de-regulated and we are now paying the prices in line with international crude price. If we had paid at correct levels back then, we would not have to be paying the interest now. And current prices would have been better.

A case of use now, pay later. Something similar to buying something on credit. And then instead of paying the principal asap, we keep paying the interest. The interest keeps mounting. And the principal stays.

We paid part of the price at that time, and the balance, still going on.

Another point is:

Our constitution gives us freedom to purchase what we want, go where we want. But I often wonder if people are mixing this constitutional right to include the right to Low fuel prices !

When a car manufacturer increases prices, no one complains. Not this much. Even if the price increased by 50k, a person will still go and buy the car he wanted.

But when fuel prices increase, that is a cardinal sin ?


***
Having all this, pls note that I too pay the same prices. Like everyone, the prices are visible to me too. I too want better prices than what we pay now. But like Norhog said, the net outgo is about the same.

With increasing Ethanol blending, things will improve a bit.

I wont get into the overall situation in the country today, and the need for sufficient revenue to meet on-going and unknown future challenges that we all will collectively face in the future. Everything needs to be taken care of by the government. You and I are well insulated from all that today.

Most of the posts in these threads are emotional, triggered by the psychology of seeing a 100. But the larger view of all that goes into pricing, the need to balance many many things by the government for national expenditure, against revenue from the revenue streams is sorely missing.


*

Are the higher fuel prices impacting the savings level of people so much that they have to be so vociferous of the current prices ? I dont think so.

[tacho]

Originally Posted by condor

Another point is:

Our constitution gives us freedom to purchase what we want, go where we want. But I often wonder if people are mixing this constitutional right to include the right to Low fuel prices !

When a car manufacturer increases prices, no one complains. Not this much. Even if the price increased by 50k, a person will still go and buy the car he wanted.

But when fuel prices increase, that is a cardinal sin ?

Cars are sold in a free market. The fuel market is a monopoly, with the prices set by governments we elect.

If fuel prices have really been deregulated like claimed, why do they nearly always go up? Was deregulation of prices a blatant lie by those we elected? Has anyone in power ever answered this question? Is there an upper limit to the amount of taxes? Don't we deserve to know when the taxes on fuel will stop increasing, or at least what the plan is? Why do they go up only a few paise per day? Why didn't they increase in April when elections were going on? I don't know, were the global fuel prices really constant down to the last paise in April?

A little more transparency by administrators would help. It doesn't compare with the pricing strategies of car manufacturers because it is none of our business.

[CrAzY dRiVeR]

Originally Posted by condor

When a car manufacturer increases prices, no one complains. Not this much. Even if the price increased by 50k, a person will still go and buy the car he wanted.

But when fuel prices increase, that is a cardinal sin ?

When car prices increase - it's very much because of the taxes again! For example - here is the breakup for an Octavia recently posted by a member.



Simply put - companies get only half! Considering we pay from income tax deducted income - government takes more from our total earnings than the companies when a car is purchased. But we blame the manufacturers all we want for price increase!

Sadly, a bad time to be a driving enthusiast - both car prices and fuel prices are going through the roof! Things mostly won't improve either - irrespective of politics.

[anb]

Originally Posted by condor

Another point is:

Our constitution gives us freedom to purchase what we want, go where we want. But I often wonder if people are mixing this constitutional right to include the right to Low fuel prices !

When a car manufacturer increases prices, no one complains. Not this much. Even if the price increased by 50k, a person will still go and buy the car he wanted.

But when fuel prices increase, that is a cardinal sin ?

If the price of a vehicle increases, we have the freedom to opt for a cheaper vehicle or even a second hand vehicle. If the price of petrol/diesel goes up, we don’t have an alternate or second hand choice.

[batish]

Originally Posted by condor

Net sum of outgo for a person even with the current high prices, even considering inflation, is not that much.

Sir, with due respect. How? How is it not much?

Over the years we have seen some prices go up, some down, our salaries are higher (for most), and we are actually able to manage the increased prices.

Sir even if you consider whole of TeamBHP community, we are not the entire nation. I agree with you, we might be able to manage, but can most of our nation? There have been people kicked out of their jobs, businesses shut due to lockdown, just imagine their plight with regard to inflation.

The amount of money we are paying over these years comes close to 2.5 lakh crore when we include the bond value, the interests, and the amount that was pending to Iran.

All these years amount to 2.5 Lakh Crore. As shown in image, from 2009 to 2026, it's 15 years. You said this amount is along with interest and other components. Fine. It wasn't a good option. Agreed. Now, this fiscal year government's income from fuel will be around 4 Lakh Crore. This is for just ONE YEAR. Single fiscal year in which we had lockdown, businesses shut and people stuck at homes due to Covid.

In later half of 2014, the prices were de-regulated and we are now paying the prices in line with international crude price. If we had paid at correct levels back then, we would not have to be paying the interest now. And current prices would have been better.

Better, how much better? Government has already raked in the amount inclusive of interest and what not. Regarding de-regulation, I wonder what kind of deregulation and free market is this where the prices just pause before and during elections. Once the results are out they again start like a stopwatch.

We paid part of the price at that time, and the balance, still going on.

We paid much much more than we ought to.

Another point is:

Our constitution gives us freedom to purchase what we want, go where we want. But I often wonder if people are mixing this constitutional right to include the right to Low fuel prices !

People do this when there is no accountability from the person who is raking this much from us, and still people have to be at their own when we need government the most. We have all seen how catastrophic previous months were. Dying due to lack of oxygen is not something anybody wants when they paid through their nose.

When a car manufacturer increases prices, no one complains. Not this much. Even if the price increased by 50k, a person will still go and buy the car he wanted.

But when fuel prices increase, that is a cardinal sin ?

I'll try explaining in simple terms. Not everybody buys car. Infact, Not everybody has a car. If the price is increased by even 100k it won't pinch everybody, as not everybody is in the market to buy a car. It can be deferred, and even if he buys it is his personal decision to go and buy. He hasn't been forced at a gunpoint to buy one whereas when fuel prices increase it affects every single commodity.

Every single commodity manufactured has to be transported. End to end transportation requires Trucks. A truck has fuel economy of 2-3 kmpl. So when fuel price increases 24 times in 6 months, it affects the cost of transporting goods. That transportation cost is passed on to the consumer.

I again repeat, each adult individual in this country today is a consumer. We need food to sustain ourselves. The cost of that commodity which is food, increases. Not everybody is salaried who could manage this increase.

With increasing Ethanol blending, things will improve a bit.

This is a different topic altogether.

Most of the posts in these threads are emotional, triggered by the psychology of seeing a 100. But the larger view of all that goes into pricing, the need to balance many many things by the government for national expenditure, against revenue from the revenue streams is sorely missing.

Not really emotional. I wish they were. Oh yeah! A trivia: RBI's monetary panel has been suggesting the government to cut on taxes to control inflation.
I hope they're not emotional.

Are the higher fuel prices impacting the savings level of people so much that they have to be so vociferous of the current prices ? I dont think so.

Directly not that much. But wait for a month or two. See the effect on retail and wholesale inflation. It has already breached the target set by RBI. We're probably at stagflation. Just wait for few more days, we'll be seeing reports from the government itself.

[Emvi]

Slightly off topic, can someone please enlighten me on the subject in simpler terms- Leaving aside other taxes, what are fuel taxes generally used for in our country? Is there any provision to utilize the taxes for 'unplanned/impromptu expenditure'?

Note: Moderators may delete this post if you find my queries peripheral.

[V.Narayan]

https://www.thehindubusinessline.com...le34833933.ece

Picture of the news clipping below.

There are several reasons why the fuel prices are so high. Without getting into any political debate both sides are equally to blame. The current administration for a not so wise management of the economy for now the 4th year and the previous administration for kicking the can down the road by making the oil PSUs subsidize retail prices in return for 10-year govt bonds which now need to be redeemed. Of course poor management of Govt expenditure remains an issue regardless of who is in power. With our expected real GDP growth rate with reference to 2019-20 not likely to be a bouncy 6% to 7% or even 5%* the Govt for the next 2 years at least will struggle to balance the books. If in the mean time the $-INR rate goes against the Rupee expect more pressure on petrol & diesel prices.

*These are just my own estimates

[Carpainter]

Look first of all I can safely say that we're a bunch of automobile enthusiast and the price rise of something as primitive as fuel to run a car does hurt us all. Personally I can say that I don't have any affiliation to any political party and I don't bother which political party or which leader is at the government as long as their policies are beneficial to the public at large. We have no intention to personally bash anyone or any politician for that matter. If any of my previous comments hurt anyone, I'm really sorry for that. It was not meant to be.

Originally Posted by condor

In later half of 2014, the prices were de-regulated and we are now paying the prices in line with international crude price.

Can't say I agree with you here. As some bhpians have already said, if prices were to be deregulated completely then how come extra excise duties were levied at every opportunity when the international crude price took a nosedive. I don't have the exact data but since the deregulation, I think close to Rs 20 or more excise duty has been levied. Even during the last year's worldwide lockdown when crude oil prices plummeted to lower levels, consumers in India didn't benefit from it. The internet is flooded with such articles. If this is what deregulation means then my arguments end here. I know government needs to earn to attain its fiscal goals but there has to be a proper planning or policy and if there is one, the the people of India deserve to know that don't you think. Even if we accept that it was done to ride the covid wave then also there was PM care fund for that. Let's say government needed more fund from fuel for covid devastated economy. Even then after all these extra taxes, what we got was another covid impact where our healthcare infrastructure failed. Needless to say we didn't even get half of what other countries got from their governments in terms of financial support in the aftermath. Will an excise duty reversal in near future solve all the problems and bring down inflation overnight. I'm not sure. But atleast it will show a good intention from the government. Something called empathy which is severely lacking of late.

Another point is:

Our constitution gives us freedom to purchase what we want, go where we want. But I often wonder if people are mixing this constitutional right to include the right to Low fuel prices !

When a car manufacturer increases prices, no one complains. Not this much. Even if the price increased by 50k, a person will still go and buy the car he wanted.

But when fuel prices increase, that is a cardinal sin ?

No, lower fuel price is not our constitutional right but since it's a big part of our overall economic activity, it automatically comes to our discussion specially when lower income and higher inflation is already pinching everyone's pocket.. But even when manufacturers increase their prices we do discuss that as well. Just search the forum and you'll see how many members complain when Toyota launch Fortuner for 40 lakh or Creta becomes a 20 lakh car. Just that it doesn't affect everyone as already discussed by fellow bhpians.

[ramzsys]

The magnitude of pessimism and doom that's being observed in the fuel threads is not seen out there in the public spaces; everyone's going about their business as usual (I live in a suburban/rural place where there's ample agricultural as well as industrial workers).

By the way, free speech goes both ways; anyone can criticize the government and anyone can criticize the critics as well.

[Slick]

Originally Posted by condor

However:
Upto May 2014, fuel prices were regulated by government........

If anyone views all this a little deeper, it can be seen that - for the lower, unregulated prices we paid back then, we are actually still paying for that even now. We have paid for that over the past 7 years, and we will continue to pay for the next 5 years.

The bonds were created to control the fuel prices, in order to control inflation. The crude prices at that time warranted fuel prices beyond hundred. It was also done by previous Governments, subsidize when crude is high and recover when it falls. This was ofcourse Regulated Era.

In later half of 2014, the prices were de-regulated and we are now paying the prices in line with international crude price. If we had paid at correct levels back then, we would not have to be paying the interest now. And current prices would have been better.

A case of use now, pay later. Something similar to buying something on credit. And then instead of paying the principal asap, we keep paying the interest. The interest keeps mounting. And the principal stays.

We paid part of the price at that time, and the balance, still going on.

Yes, Agreed, it's a loan, but what is the premium? Are we charging INR33 + on a litre of fuel as a tax due to this premium?

Eg. The Govt paid INR9990Crs premium in 2017-18 when they earned INR229019Cr fuel revenue.

So the premium in essence was 4.3% of the revenue. It is too less to affect the retail fuel price drastically. So INR1.5 out of 33.

Originally Posted by V.Narayan

https://www.thehindubusinessline.com...le34833933.ece

There are several reasons why the fuel prices are so high. Without getting into any political debate both sides are equally to blame. The current administration for a not so wise management of the economy for now the 4th year and the previous administration for kicking the can down the road by making the oil PSUs subsidize retail prices in return for 10-year govt bonds which now need to be redeemed. Of course poor management of Govt expenditure remains an issue regardless of who is in power. With our expected real GDP growth rate with reference to 2019-20 not likely to be a bouncy 6% to 7% or even 5%* the Govt for the next 2 years at least will struggle to balance the books. If in the mean time the $-INR rate goes against the Rupee expect more pressure on petrol & diesel prices.

*These are just my own estimates

I disagree with the oil bond theory Sir.

This is from the petrol crossing 100 thread. discussing the same scenario.
https://www.team-bhp.com/forum/india...ml#post5013762 (Regular petrol hits a century for the first-ever time in India)

The oil bond payments are a fraction of the total revenue from fuel. The fuel is being priced high from 2014. Now it has reached exorbitant levels, hence the hue and cry.

- Slick

[DHARM]

Friends,

How many political leaders have you seen opposing Central government for rise in fuel prices? I only saw few leaders miledly criticised the govt for photo oppertunity thats all. lets accept both state and central govt are doing this together as no state govt has reduced the tax on fuel till now (both are milking us). Dealer commission too has gone up.

The way I am observing the fuel price trend since March 2020. govt never reduced the tax or allowed fuel prices to go down much, even when the prices were USD 22 per Barrel.They eat away entire reduction in crude oil price to compensate other revenue losses, higher defence expediture, spending on infrastructure as generally done by all governments when private sector spend goes down or pay for food subsidy, vaccination etc. (I am just an observer). Another key reason for central govt is sale of BPCL on priority basis, hence they can not interfere in to the margins/profitability of Oil Marketing Co. This gave me an impression that govt will blink only with regards to taxes when oil prices start going above USD 80 for a barrel or when petrol prices reach RS.115-120/-. At that time Inflation too will start impecting the economy and it may lead to rise in Interest rates (Govt. would not allow higher interest rate as it affects them more than revenue from fuel taxes)

As a end user we have limited means to counter this price rise hence I started buying oil PSU Co and Oil Marketing company's shares since last year anticipating Crude oil price going up was expected when global economy attains pre covid levels. This move has helped me immensely. Now the dividend from these companies are more than enough to pay for annual fuel expenses and capital gain is good enough to buy an electric vehicle. Cant predict the future of Oil Marketing Co. margins going forward but it will continue till govt's objective of selling BPCL concludes.

[locusjag]

Originally Posted by Carpainter

Look first of all I can safely say that we're a bunch of automobile enthusiast and the price rise of something as primitive as fuel to run a car does hurt us all. Personally I can say that I don't have any affiliation to any political party and I don't bother which political party or which leader is at the government as long as their policies are beneficial to the public at large. We have no intention to personally bash anyone or any politician for that matter. If any of my previous comments hurt anyone, I'm really sorry for that. It was not meant to be.

OT - please bear with me

You didn't mean any harm; I'm sure. I'm not sure of norhog though, for the bludgeoning he took here was brutal. If he as a member doesn't ever come back, the forum is the poorer for it collectively.

I also know of two other members who were similarly attacked on the Coronavirus thread. Both were bludgeoned out of the forum; it so happens that the both were also incredibly knowledgeable about automobiles and they have personally helped me and a lot of other members (and non-members) with their gyaan. They are gone now. They only scoff at me when I tell them I'm still active here.

As Oscar Wilde once said - "Democracy is bludgeoning of the people, for the people and by the people." It is likely your personal choices will get bludgeoned by people with different desires. This is how it is because you're in a democracy. That means citizens cannot attack fellow citizens for their different choices, however diametrically opposed their desires are - even those who support fuel taxation! Even less so on this restricted forum, where there are explicit rules against personal and politically motivated attacks.

I still think norhog should've safely gotten onto his boat when the first blood drop hit the sea water. No good ever comes of trying to sell veganism to sharks.

[Technic90]

Few things I picked up from this thread. I am not being sarcastic, I actually noticed these points.

1. There is no price rise anywhere. Inflation is a myth
2. Increasing tax on fuel doesn't impact anyone
3. Car prices are increasing, so fuel price should also increase
4. People are not protesting so everything's alright
5. But when people protest over something, they are being unreasonable
6. High fuel prices are necessary to encourage public transportation as our infrastructure is on par with Singapore, Hong Kong and Europe but people just don't see it sitting in their cars
7. High fuel prices will encourage people to walk or cycle which will make them healthy so less money spent on medicines and junk food, so inflation is balanced
8. Fuel prices are deregulated so governments are not responsible for imposing 100%+ tax
9. Policies implemented before 2014 has led to high fuel prices today
10. When people can afford car, why can't they afford fuel at couple of rs100
11. If you look carefully, most cities in India have metros connecting to each and every corner of the city
12. Fuel prices don't impact everyone, like it only impacts people who buy vegetables which are transported by a truck running on diesel
13. Our fuel prices can be higher than New York because our 4G data pack is among the world's cheapest
14. Let the government decide what we should afford to buy
15. Our taxes are never misused
16. One shouldn't speak of fuel price unless they have a PhD in Economics. Just paying taxes is not enough to understand the impact on personal savings

In short, high fuel prices is a genius idea. Wonder why no one thought of this before.