[Aditya]

Petrol has been selling at a price of more than Rs. 100 per litre in six states and union territories in India including Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana and Ladakh. Now, it is the turn of diesel to cross the Rs. 100 per litre mark.

In Rajasthan, the price of a litre of diesel has touched Rs. 99.80 after oil companies raised fuel prices on Friday. While the price of petrol was hiked by 29 paise per litre, that of diesel was increased by 28 paise. Since May 4, 2021, oil companies have hiked fuel prices 22 times. The price of petrol has increased by Rs. 5.45 per litre and diesel by Rs 6.02 per litre. The highest prices of petrol and diesel in the country are Rs. 106.94 and Rs. 99.80 per litre, respectively, in the Sri Ganganagar district of Rajasthan.



Over the last seven years, the Government of India has hiked taxes on petrol by two times and on diesel by almost eight times. Among the states, Rajasthan levies the maximum VAT on fuel with Madhya Pradesh, Maharashtra, Andhra Pradesh and Telangana following.

On May 29, Mumbai became the first metro city in India to sell petrol at a price of more than Rs 100 per litre.

Source: Times of India

[VWAllstar]

Originally Posted by Aditya

Petrol has been selling at a price of more than Rs. 100 per litre in six states and union territories in India including Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana and Ladakh. Now, it is the turn of diesel to cross the Rs. 100 per litre mark

Team BHP should come up with a Dislike option specifically for this news! Horrible times for people who have to drive a lot for work or otherwise. With the conditions too not been much favourable, such hikes are only going to discourage new car buyers. I hope with the elections, this is corrected and we see prices in 70s' a ltr again.

[VKumar]

I would like to seek the take of someone fluent with economics on how I am interpreting the things these days:

• Petrol price goes up -> Running cost for cars goes up -> A few of them are cabs too, hence transportation cost goes up slightly
• Petrol price goes up -> Running cost for motorcycles goes up -> A large number of delivery guys use motorcycles -> Their savings go down with the rising running cost, if the company doesn't increase the per/km cost, which they aren't increasing these days

For the first ones, the ones who manage to own a car (Let's talk about the gentleman who earns about 35k a month, pays 25k for domestic expenses, and 6k towards the Alto EMI). He has to pay for rations and all.

While the second one, these guys mostly get the benefits of the schemes like Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY), hence a family of 4 receives 20 kilogram of free rations per month.

Then the prices of diesel goes up. Sh. Dharmendra Pradhan made it clear 2 days back that fuel prices won't be coming down in a few coming months as Government has to balance the public expenditure with tax receipts. so, the tax receipts have to go up.

Diesel Price Goes UP:

• Corporate travel cost goes up
• State transport cost goes up
• Freight forwarding becomes expensive
• Goods price goes up
• Agricultural production cost goes up

As per the study conducted by Nielsen in 2014, diesel constitutes of 44% of the total petroleum product sales in India, while petrol does only 10%. So, the impact of diesel price fluctuations is definitely going to be higher.

So, effectively, isn't this a simple cycle of increasing the inflation, and then provide free food to the lower rung. But letting the middle class pay through their nose? It's not the upper middle class and elite club that is going to feel the heat of inflation. It is the lower middle class that is actually going to feel the heat. Some people have the logic that fuel costs of their cars are 0 in lockdown. But the goods transport costs are already going up, once the restrictions are removed, they are bound to skyrocket along with the demand.

Increased prices brings down the demand, instead of focusing on the increasing the consumption or making for a consumption led recovery, the powers to be just want to juice out every penny from the savings of the common man. And that raises an alarm IMO. Instead of pricing the fuel so high that people cut their driving distance, wasn't it a better option to price the fuel at an optimal point where it would make mobility cheaper? The more the people will drive, the more places they will visit, and more they will spend on travel, vehicle, roadside eateries etc.

So, overall middle class is being injured, and then being insulted - for what? For not earning high enough to not feel the heat, as well as for not earning low enough to get the government schemes advantage too.

By the way, in its fortnightly monetary policy reviews, RBI has been suggesting government to cut down the indirect taxes on petrol and diesel since over 6 months!

[anb]

I remember diesel excise duty was increased by a massive Rs. 13 per litre on 6th May 2020 due to low crude oil prices, resulting in an overall increase of Rs16 per litre considering around 20% VAT. Will the government roll back the hike ?

[mugen_pinaki27]

On a road trip to Rajasthan in March 2021, I tanked up my WagonR with 24 litres of petrol in Faridabad at 88.90 Rs which in Delhi would have costed me 93 Rs. When I entered Rajasthan, it was an eye-watering 98.10 Rs. And by the havoc this pandemic has wrecked on our economy, the hike isn't going to be reversed anytime soon :(

[octane_100]

For the Government, Petrol and Diesel are the geese that lay golden egg. It's quite unfortunate that fuel has to bear the brunt of supporting the public expenditure every time. While one can argue that expenditure in any which way will have to be borne by the tax payers, fuel is something that affects our pockets everyday. And for most people who are not on a monthly pay check, becomes highly cumbersome to balance their expenses. Not to mention the spiralling effect on commodity prices and hence inflation!

[AKSarkar1]

Originally Posted by VKumar

I would like to seek the take of someone fluent with economics on how I am interpreting the things these days:
So, overall middle class is being injured, and then being insulted - for what? It's not the upper-middle class and elite club that is going to feel the heat of inflation. It is the lower middle class that is actually going to feel the heat. For not earning high enough to not feel the heat, as well as for not earning low enough to get the government schemes advantage too.

I would call that explanation quite apt IMHO. Being from an economics/business educational background this is the explanation I would have given without making things apolitical. I could elaborate more but that would be at the risk of making things political and I don't want that on our sacred forum.

The only humble amendment that I would make is to the upper-middle-class sentence, they too will definitely feel the heat. The rich or the 'elite club' will feel the heat in a different way through increased COGS/Operational costs for their businesses (not generalizing all rich folks have businesses). On a personal level for their own transportation, I doubt the wealthier folks would care much. A neighbour and a friend of mine still drive his Urus every alternative day, folks on this forum from Lokhandwala might be familiar with that Urus.

Regardless of what supply/demand-side policies the government is pitching, speaking from a common man's perspective this really stinks. With Covid, people are already in a massive lurch with people being laid-off/having pay-cuts etc. Personal transportation has become more of a need than a luxury and pricing such a commodity in such a way during these times is sad (to say the least).

To conclude, I am in NO way making one pricing policy of the government a trope for their overall economic policies. Strictly speaking from a common man's perspective who likes and needs to drive for work, we all could benefit from lesser fuel prices given the current scenario.

For the sake of the forum quality and my peace of mind, I'm not going to reply back to any counter thoughts on this particular thread as they can go a different way depending on which 'wing' you fly with. Peace

[Turbohead]

High time offices start providing amenities to have a shower everyday. This way, I can start cycling to office as long as the trip is 15kms max one way.

This way I can stay healthy, work out twice a day and save hell lot of money on buying, maintaining and running a vehicle apart from being looted by taxes.

I used to scoff at Europeans cycling to work but now it makes so much sense!

It may be just me but I've become a full blown miser after starting to work.

[jithin23]

Originally Posted by jithin23

I don't want to create a controversy though but one thing that intrigues me is that the government forces all kinds of weird rules and taxes on the public overnight and why can't the public ( us including me) raise an RTI as for why we need to pay so much in taxes for fuel because taxes on fuel has a cascading effect on the economy. Cost of living rises despite salaries being stagnant. Transportation cost including bus and train tickets will increase.
For most SME businesses in India it's even tricky. People's budgets can go haywire that too in the midst of a pandemic where most of them don't have a constant income source.

I know the consequences involved if we question the government individually but if a collective community or groups of people across the country voice out, then the government will be in a position to answer. At least a change.org petition can be a spark.

I'm also aware that me ranting might not ease the situation but at least someday if some good soul from the Central or state government reads this, they might understand our plight and do something. On the flip side if they reduce the taxes to a sane amount, there will be more users and patronage which will in turn keep the government's coffers full.

In 3 years Diesel and Petrol prices have increased by ₹25-30 and LPG by ₹250-300. One LPG domestic use cylinder today costs 820+50 extra for the delivery guy. Subsidiy has been stopped as well. Even if they don't give back subsidy money it's ok but there needs to be a sanity while pricing such essential things needed for daily living. What will the lower level folks who get 10-25k salary a month do. That too if they have dependents it's much worse. They can only barely manage to stay afloat and not keep aside money even in case of an emergency.

The free fuel allowance and car what politicians get needs to be cut and they must be told that they need to bear their own fuel costs. Then we'll see a massive overnight dip in the fuel prices.

I feel cost of living abroad vs India is almost on par albeit with a better quality of life in the case of the former.

I might have been critical in my post but this is the bitter truth we're swallowing. Mods please feel free to delete this post of you feel it's inappropriate.

Quoting myself from the fuel prices thread and I believe it holds good for this thread too. Once lockdowns are over, we're going to see the actual reaction of the public and other political outfits. Thats when people will start going out to make a living or for leisure and they're in for a rude shock. Already protests are being held in some parts of the country now regarding the fuel prices.

One example I'd like to give here:
Most of the 2 wheelers give an city average of 30-35kmpl(not including the likes of CT 100 or splendor) a twenty something person would prefer a Duke/Pulsar/RE or a Dio so I've taken that average mileage for such bikes. So if the commute is 30km to and fro a day + a few more kms to run errands+a small weekend ride(about 100-150 km to and fro), the total running cost for 300km is about 1000 and 4k for 4 weeks , plus quarterly maintenance which is very expensive for transport. Plus what if the person has a a loan on the bike.

With respect to cars, the average city mileage is 7-10 for petrol and 10-14 for diesel and assuming the same usage pattern it'll cost close to 2k a week and 8-10k a month+ EMI which is eye watering.

This will affect budgets of most homes and can push people to poverty due to the cascading effect fuel prices have in our daily lives. What about those who travel from one district to another daily for their livelihood(especially the Tata Ace and bolero pick up kinda guys). That will be a huge dent in finances for such folks.

The prices in online portals (Amazon,Myntra) have also shot up compared to the last 3 months due to?? The answer lies in the thread title itself.

This trend is disturbing and a person who is going for a bike or a car might think twice before purchasing because of the ever increasing prices in taxes , maintenance and especially fuel.

[FlashMustang]

Spot on observations by VKumar!

It is high time the government reverses the additional excise duty imposed when the global crude prices hit a low point in early 2020.

It would be a better approach to let economic activities pick-up and revive the economy, thereby generating increased tax collections. Trying to earn quick tax revenue through high taxes on fuel kills the rebound of economic activities, leading to reduced consumption. Consumption is hit by inflationary tendencies across the board due to high fuel prices, especially diesel.

When consumers' earnings are not keeping pace with the inflation across the board, consumption is bound to reduce. This would lead to even lower tax collection. What then? An even further increase in fuel prices to make up for reduced tax receipts? At some point, they ought to realize this. For the good of the nation, I really hope the realization dawns sooner than later.

While I understand the fossil fuels should not be subsidized, in order to promote the development of alternative and clean energy sources, we are at the other end of the spectrum where we are heavily taxing fossil fuels. There needs to be a balance.

[dark.knight]

It's simple, fuel and cooking gas prices go up, everything goes up, let's say that all such prices have gone up 30% over the past 3 years, expect to either earn 30% more to keep up with this hot air balloon levels of inflation, or expect your present savings to only last 70% as previously estimated.

Movement is business, people should move, people should buy, people should work, but to anyone reading from outside of India, forums such as these would have them all believe that India isn't affected as most are working or studying from home when the reality is that more than 90% of the economy belongs to brick and mortar stores, transit agencies, imports & exports and production, all needing fuel and power which has gone up by 30%, you are still burning through your cash even when at home.

[GTO]

Well, diesel car owners will still be frowning a bit lesser than their petrol counterparts. Reason = depending on the car / segment, diesel engines can give between 40 - 100% higher fuel economy. Even in a heavy vehicle like the Thar, the diesel variant will give 12 kmpl in the city. Petrol will be more like 6 - 7 kmpl.

Originally Posted by Turbohead

High time offices start providing amenities to have a shower everyday. This way, I can start cycling to office as long as the trip is 15kms max one way.

IIRC, Moderator bblost used to actually do this.

[Axe77]

Originally Posted by Turbohead

High time offices start providing amenities to have a shower everyday. This way, I can start cycling to office as long as the trip is 15kms max one way.
.

And depending on your city / route, cycling 15 kms one way can actually take around similar time that it takes to commute in a car.

Honestly, if your job only requires you to be at your desk and not move about for meetings during the day (in your own car), then cycling to and fro work is actually an option. Assuming there are shower facilities of course.

A neighbour of mine used to actually bike to work regularly from Parel to Powai (a top executive in the company). That should be ~20-25 kms one way.

[RedTerrano]

Frankly speaking I am not surprised. When Petrol crossed 100, I think GoI / State Govts justified it, pointing to the massive health infra expenses as well as the numerous freebies. On top of it, the enforced lockdowns have resulted in a massive hit to the economy.

I won't be surprised if GoI / State Govts justifies this one more time.

[revmaxx]

Make hay while the moon shines, seems to be the norm as far as fuel pricing logic goes. Vehicle sales were booming up till April even during the slow economic scenario. Government must be taking those factors into consideration and saying, hey why don't we make hay.