[Ym-enjn]

I don't understand what is worring the govt? Is it the diesel used by fiesta, verna, megnum, laura and safari, scorpio? Or is it the increasing demand of these cars? If its first then I wonder how much these cars use in oppose to the commercial eatup. If the problem is second then there are several ways to demotivate the increase in sales of these cars. In both cases there is no need to have dual price of diesel.

[theMAG]

Originally Posted by PatchyBoy

The day when subsidies are removed completely and diesel starts costing as much as, if not more, than petrol is not far.

True. Chidambaram also said the same on a recent CNBC interview .

[Ricky_63]

Originally Posted by Ym-enjn

I don't understand what is worring the govt? Is it the diesel used by fiesta, verna, megnum, laura and safari, scorpio? Or is it the increasing demand of these cars? If its first then I wonder how much these cars use in oppose to the commercial eatup. If the problem is second then there are several ways to demotivate the increase in sales of these cars. In both cases there is no need to have dual price of diesel.

Totally agree with your observation what we need to understand is the % age of deisel consumed by the private vehicles is nothing compared to the consumption in the commercial sector.

Dual pricing will always lead to corruption & the ingenious ways of our countrymen shall come to the fore


Cheers

[theMAG]

One development that will happen with certainty if this dual-pricing is implemented. Gross black market. Personal owners will simply go to these shops instead of petrol bunks. The cops will allow it to flourish of course, until a central govt clampdown occurs. In which case everyone will lie low for a few weeks and then everything would start again.

The govt will actually lose more money than now if they implement this.

[psp62in]

Now this may sound a silly question, and pardon my ignorance if it is one indeed.

It is known that the diesel engines are intrinsically more efficient than petrol (to the extent of 15-20%). I am not aware about the true mfg. cost of diesel vs. petrol per liter. Assuming that both are almost same, is it not in national interest to promote the modern Diesel engines rather than petrol? It will be more environment friendly too.

[zaks]

I think there is some rationale for curbing diesel consumption which is purely because of its lower price. That said, the major chunk of diesel consumption happens not in any private vehicle but in commercial sector like transportation-trains and trucks, DG sets and furnaces in industries, etc. The diesel used by malls and office & apartment complexes contribute some more, so govt is actually trying to shoot itself in the foot if they try to implement this.
Look, as the economy grows the fuel consumption increases too and the above factors contribute heavily compared to some people driving diesel cars in cities. There was a reason why the govt priced diesel lower than petrol and it still holds good. All the brouhaha is because of the recent blow up in fuel prices which increased the burden on the oil companies.

[vipul_singh]

Originally Posted by psp62in

It is known that the diesel engines are intrinsically more efficient than petrol (to the extent of 15-20%). I am not aware about the true mfg. cost of diesel vs. petrol per liter. Assuming that both are almost same, is it not in national interest to promote the modern Diesel engines rather than petrol? It will be more environment friendly too.

You are correct that diesel engines are more fuel efficient, but whether or not the government should promote diesels over petrol would depend on two factors:

1. The yield (petrol v/s diesel) of the product from a unit amount of crude
2. Emissions

I do not know the definitive answer to either (1) or (2). I hope the people in the government do.

[sridharps]

This is the kind of problem with no easy solutions. See the multiple angles involved:
a) The demand for diesel has gone skyward and the govt is unable to match supply to demand. Witness the rationing that happened in many cities recently.
b) The policy of subsidy for so many years has meant that the issue of pricing has become a political minefield. Powerful lobbies are at work.
c) Any attempt to link fuel prices to market prices may also lead to short term inflation, apart from creating a political furore. The government can ill afford this in an election year.
d) A dual pricing mechanism will lead to the system being manipulated and all kinds of malpractices.
e) The Oil companies need to be shown a clear roadmap to profitability.

It requires a creative brain to solve this conundrum.

[Gangsta]

Politians are going nowhere, but they are finding each and every opportunity to distroy Indian Economy and to fill their pockets as Elections are coming i'm sure present Central Govt. wont win this time. That Rediculous. They are shutting all the doors for Janta to relax. First Hiking up petrol price and now diesel price for non commercial vehicals.

I seriously don't understand why janta don't come on roads against these stupid politians who even know the spelling of Diesel.

OT: at the time of nuclear deal, press asked few politians who were present there about the nuclear deal. Politians don't even know what is "Engergy"? He ans. in Hindi...
Just like we have electrical energy water energy sun energy there is some energy nuclear energy. Damn its pethatic then they asked spelling of Energy. These fools don't even know the spelling of energy.

[shatrughna]

Since, July I have this bad experience. My regular pumps at New Mumbai - invariably dont have fuel( diesel) available and I almost have to visit 3-4 pumps before I can take refill. This is not a happy sign and I sincerely feel it is an artificially created shortage by the producers and dealers. The loss making stories are all cooked up stories imho. In the overall perspective there is no shortage of funds either. It is mainly the business models that the producers/ refiners adapt which may not suit every dealer and hence, they buy limited quantities which gets used up.

By adopting dual price policy what govt will gain. I guess its still a very small percentage of total diesel consumers ( in auto segment- trucks and taxis must be the biggest chunk). However, may be the gen set users would be causing this line of thinking.

[GenuineOptimist]

Differential pricing for commercial vs private consumption isn't that difficult to conceive. Someone has already mentioned the color additive that can be used to visually differentiate. Odour additives can also be used and one need to just open the fuel tank lid to find if a private vehicle is misusing commercial grade fuel.

Problem is - the corruption in our country will make sure that the police guys will 'pass-off' the private vehicles by taking a few hundred rupees as bribe. But still, thousands of private vehicle owners will shy-off from using illegal colored/odored commercial diesel and this in itself will cut the demand by a substantial amount.

It is a welcome move. Atleast we'll be assured of the supply of private diesel and one need not wait in queue or run around to procure diesel. Diesel scarcity in gargantuan proportion will result for sure if differential pricing isn't implemented quickly.

Scorpio/Safari owners will continue to use diesel but just have to pay the right price that reflects the cost of using these vehicles. So, all in all, its a move in the right direction.. no matter from which angle you look at it.

[mjothi]

Originally Posted by Gangsta

First Hiking up petrol price and now diesel price for non commercial vehicals.

I was thinking we do understand why Diesel should be on par in price with Petrol if not more. The only question is how do Govt achieve this while keeping the Public services unaffected. Right?

And who knows, they (govt) may even have a "excellent" plan to handle this. Lets wait & watch.

May be once the both price are made same, who knows the Petrol also will be lesser than what it is sold now. Ok, ok, I am wishing for horses!!!

[condor]

METISWHG : Most of the diesel vehicles are private to my guess.
Path_Finder : Car consumption of diesel is miniscule compared to that of goods transport and public transport..

But most consumption is by commercial vehicles. I may visit the pump twice a month. The commercial vehicle, including the cab, may visit the pump every other day.

METISWHG : we can have specefically enabled pumps.

Direct implementation of quota will be difficult & not desirable. A better option is separate bunks, or separate tanks with different colored fuel.

teknophobia : A gas guzzler tax would be an extremely good idea, butit should be implemented for both petrol and diesel vehicles.

Dont we already have in, but in a different form - of having higher road tax for vehicles of higher displacement ? Eg: Karnataka.

zenx : Well, even at the same price, diesels are inherently more efficient, and toquey.

If I am driving a truck, I will go for a diesel.

shatrughna : The loss making stories are all cooked up stories imho. In the overall perspective there is no shortage of funds either.

By adopting dual price policy what govt will gain. I guess its still a very small percentage of total diesel consumers ... However, may be the gen set users would be causing this line of thinking.

Agree on both points, and we have already discussed the notional losses the oil co's.

Considering that the biggest consumers are commercial vehicles, the govt shouldnt gain much. If this policy is implemented as discussed here, the gen-set users will have to pay more for their diesel too. This sounds logical.

In all this, the off-shoot of this can be a more comparative pricing of petrol & diesel vehicles. If that does happen, will we see a reversal of tax rates - to one with a higher tax rate for commercial diesel vehicles, since they pay less for diesel consumed ? That would be fair, I guess.

[Max]

Originally Posted by GenuineOptimist

Differential pricing for commercial vs private consumption isn't that difficult to conceive. Someone has already mentioned the color additive that can be used to visually differentiate. Odour additives can also be used and one need to just open the fuel tank lid to find if a private vehicle is misusing commercial grade fuel.

Problem is - the corruption in our country will make sure that the police guys will 'pass-off' the private vehicles by taking a few hundred rupees as bribe. But still, thousands of private vehicle owners will shy-off from using illegal colored/odored commercial diesel and this in itself will cut the demand by a substantial amount.

It is a welcome move. Atleast we'll be assured of the supply of private diesel and one need not wait in queue or run around to procure diesel. Diesel scarcity in gargantuan proportion will result for sure if differential pricing isn't implemented quickly.

Scorpio/Safari owners will continue to use diesel but just have to pay the right price that reflects the cost of using these vehicles. So, all in all, its a move in the right direction.. no matter from which angle you look at it.

Won't this give one more point to our cops to harras us?

Alternately, instead of introducing dual pricing for diesel government can simply put flat Diesel TAX on diesel cars say rs.50,000 on time diesel engine tax and put that money in oil fund for relief to oil companies.

Dual diesel pricing will lead to lots of corruption.

[condor]

Max, I would guess that you do not drive a diesel. we are already paying a premium on diesel cars, and on vehicles with bigger displacement.

Why do you want a bigger tax on diesels only ? To be fair, everybody should share the burden. The tax should be spread across all cars - If The Current Tax levels are not enough already.