[joslicx]

Originally Posted by zaks

Well, my argument goes like this-
So don't go about battering away the diesel car owners for eating up portions of your wallet, it's not them- it is the public policy of the govt to spur growth and infrastructure that is making this dent. Of course the diesel car owners are enjoying the lower prices, but how much of total cost is it, again it's that <<1 thing, cheers:

Let it be <<1 or even <<<<1! Point is why should diesel car owners enjoy it!!! This is India. we are jealous of people enjoying any kind of advantages

[condor]

joslicx : This is India. we are jealous of people enjoying any kind of advantages

Get yourself a diesel, instead of crying this way.

Those who have diesels, have already paid initially. The ones who drive petrol vehicles have paid lower when they bought the car.

Using your arguments, why should petrol vehicles be priced lesser ? Let them also be priced the same as diesels.

[sridhga]

Originally Posted by joslicx

I dont have any grudges against affordability of cars or diesel cars. I am only questioning here one thing and that is subsidised prices of diesels enjoyed by car owners like you. There is no justification for that at all! the price of diesel is artificially kept low in india (it is not like that in most places) coz it is a fuel "primiraliy" used in commercial transportation (by trucks and locomotives). And that was done to keep prices of commodities low and this is something that benefits everyone.

Not True. Diesel is subsidised throughout Europe. It is also subsidised in several African as well as Asian Nations. However, it is not subsidised in USA, Canada and Australia. Hence diesel consumption is relatively less in these countries. Most refineries after refining crude oil sell much of the diesel within Europe and export petrol across the Atlantic to the USA. In USA most current diesels do not confirm to the emission norms of three states including NY. You know what? The same US and Canada heavily subsidise diesel for home heating purpose and call it heating oil. This is the same as diesel but is given an artificial color so that it can be identified seperately. However, there were many instances where such 'heating oil' was diverted to regular transportation use. Dual pricing is stupid and does not work whether it is implemented in India or in the US. My one cent and one paisa.

[simplyself]

The Govt is just trying to create opportunities for unemployed youth to generate some income for themselves from the racket it would surely create with the dual pricing policy. Also, as elections are becoming increasingly expensive, the politicians too can rake in the moolah.

Seriously, there is not that much difference in subsidy in petrol and diesel. Diesel is already taxed to the hilt, as is petrol. Users who argue diesel vehicles should be taxed more or that diesel should be priced higher for cars and lower for CVs should also note that there can be an argument for different petrol pricing for two-wheelers, three-wheelers and petrol driven cars.
This would result in even more revenue collection for the OMCs and the Govt. It may be incidental that the petrol consumed for two-wheeler and four wheelers is almost equal or atleast comparable. But that is not the case for the diesel powered vehicles. Cars consume a minuscule proportion.

This way users of both petrol and diesel powered vehicles can feel socially responsible and patriotic as they can feel they are contributing their mite to resolving the fuel crisis.

[alpha1]

Hah, its funny to see ppl harking and hounding for free market and no subsidy stuff, but they are sore about paying more for diesel vehicles.

The simple reason why you pay more for diesel vehicle is because the seller can sell it at higher price.
Why?
Because he knows that the running cost of diesel would be less (because of the subsidy), and hence the buyer would consider buying a higher priced diesel as compared to lesser priced gasoline.

Its simple market economics.

Now consider this: if govt does decide to remove subsidy from private diesel. Your manufacturers would be forced to sell the diesel vehicles at almost the same price as gasoline ones. Otherwise the demand for diesel vehicle goes down.

Manufacturers like Tata, Mahindra would be forced to offer their Jeeps and SUVs at much lesser price than they are offering now.

Now don't tell me that the diesel heads in this country would not be happy about that ...

[condor]

alpha1 : ... but they are sore about paying more for diesel vehicles.

@alpha1, It looks like you entirely missed the point of the discussion in this thread. Isn't it the consumers of petrol who are asking for higher price of diesel ?

The diesel consumers had not complained of paying higher for their vehicles. So how did you get the idea that people who paid more for their vehicles because of certain reasons, were sore about it ? And I also dont understand where did you find the corelation that people who "harked & hounded for free market & no subsidy stuff" were the people who were "sore" about paying more diesel vehicles ?!

People were discussing about how such schemes can be implemented. And along come OT points like this ! Let's get back to the discussion of dual pricing, and how can the govt implement it, if it can be done.

[joslicx]

Originally Posted by condor

@alpha1, It looks like you entirely missed the point of the discussion in this thread. Isn't it the consumers of petrol who are asking for higher price of diesel ?

The diesel consumers had not complained of paying higher for their vehicles. So how did you get the idea that people who paid more for their vehicles because of certain reasons, were sore about it ?

People were discussing about how such schemes can be implemented. And along come OT points like this ! Let's get back to the discussion of dual pricing, and how can the govt implement it, if it can be done.

well you are also missing one very important point here. The prices of cars are NOT determined by the govt! Swift Petrol costs less than Swift Diesel (same variant, looking at Ex showroom prices) but this difference can no way be attributed to the govt. There is a higher tax on diesel vehicle but that is done to discourage prospective buyer from going for diesel (as diesel is "primarily" a fuel meant for transport sector rather than for personal use and has been heavily subsidised in india for that reason as this kind of an arrangement benefits millions of people as this way commodities prices are lower than what they would be). Now all you or anybody can ask is to have same reg tax in case diesel prices are brought to parity with petrol (or market rates). Govt is not really in the business of determining prices of cars! A diesel engine is different technology to petrol and invariably prices of both will differ. A buyer knows it at the time of buying and most people are prefering diesels now coz it runs on the cheaper fuel (i.e. diesel)!!!

I am not anti or pro diesel. If you ask me the best would be a no subsidies scenario (both for petrol and diesel). If people want to have vehicles of any kind they should be made to pay at market rates. The govt cannot keep subsidising forever. It'll go bankrupt at some point!!!

[mjothi]

Umm, what is this thread heading to?
Seems like there will be 2 sub-division of petrol and diesel even before Govt implement what it thinks. Interesting.

[tsk1979]

Ok, the final outcome is this.
Govt has realized that dual pricing is not going to work in transport sector.
So private car owners, railways, transporters can breathe easy.
However bulk buyers of diesel like SEZs, industries etc., which buy directly from oil companies will pay 22rs/liter more.

[condor]

@TSK, any reports reg this in the news ?

Basic doubt - Rs 22/- more per liter for direct purchase ? Will this include DG sets as used by companies during power-cuts ?

[tsk1979]

Read in Economic times print edition.
Basically if its a big company who buys diesel directly from Oil companies, and the SEZs who also buy diesel directly, then they are hosed.

[Zappo]

I see only one problem out here. In the coming days you will almost always find the bunks with no diesel stock at all. In the last couple of months or more, most of the times the bunks were running a no diesel stock board. This was because, though the oil companies and MoP was insisting that bulk buyers should pick up directly from the (oil) company stock yards no body was paying heed to it. Whenever diesel arrived in a bunk one could see serpentine queue of trucks, matadors, mini-tempos etc lined up with huge sized barrels loaded at the back.

With this new ruling be assured that all fuel bunks will sell diesel to these operators at a nifty +10 rupees rate over the bunk prices. For you and me it will still be the "No diesel stock" board that will do the duty.

[supremeBaleno]

Well, if the admin guy in my office is to be believed, companies (atleast some of them) are already getting hosed. Since ours is a new facility, there is no diesel storage tank in the premises (yet) that has been certified safe by the authorities. And this means that we cannot buy direct from oil companies and instead have to buy in barrels from the neighborhood pump, who are apparently charging us some 20 odd rupees more per litre of diesel.

I would be glad if the extra money goes to the oil companies than to some unscrupulous gas station owner.

[condor]

Zappo, those should be transport related purchases. The fuel tank in an office complex cannot hold only a few barrels. (Single & Smaller buildings may, though). For supply to the DG set's tanks in our office complex, I see diesel being transported in small tanks, towed by the mini-tractors. Each of these tanks would hold more than a barrel.

This 22/- per liter may be above the sale price to the bunks. So it may translate to about 10 -15 Rs more for the purchaser.

[Technocrat]

Condor here is the complete news from E-paper

Bulk diesel consumers may have to pay mkt price
Industrial Consumers, Power Plants, Defence Establishments & SEZs Are Likely To Pay Additional Rs 22 Per Litre Under Dual Pricing
Rajeev Jayaswal NEW DELHI


THE government is set to introduce dual pricing for diesel, the largest consumed petroleum fuel in the country. Industrial consumers, power plants, defence establishments and special economic zones (SEZs) — who usually buy the fuel in bulk quantities directly from the oil companies — may no longer be able to buy subsidised diesel.
Soon, they would be required to pay the market price that would be Rs 22 per litre costlier than the subsidised diesel sold to the agriculture and public transport sectors. The oil ministry has initiated the process for the dual pricing system for bulk diesel consumers. However, diesel-run private vehicles and the Railways would be exempted from paying the market price. Transporters too will continue to enjoy cheaper diesel as an increase in fuel prices for them would have a rippling effect on the prices of daily consumption items. Diesel is sold at Rs 34.86 per litre in Delhi.
“The ministry is ready with the draft proposal and is awaiting the formal nod,” an official said. Sources close to the development said the proposal was prepared with great care so that it would not affect the common man.
The proposed move is expected to charge a market price for 12-13% diesel consumed in the country. This would save Rs 16,000 crore in a year, sources said. Cash-strapped oil marketing companies are charging a higher
price for diesel supplied to bulk industrial users and commercial establishments by supplying branded diesel which is Rs 2.25 per litre costlier than the normal diesel (Oilcos to pump premium diesel to cos, ET, June 16, 2008).
Even as the oil ministry is in favour of charging market rates for fuel supplied to diesel-run private vehicles and swank sports utility vehicles (SUVs), implementation of the same is considered impractical. “It would be difficult for a single petrol pump to charge two different rates for the same fuel from owners of different types of vehicles. Instead, the government should consider imposing substantially-high import and excise duties on such vehicles to dissuade people from buying fuel-guzzling cars,” an official said.
The aim of the tax should not be revenue generation but to dissuade the use of diesel cars. It is learnt the oil ministry move is triggered by an unusual rise in diesel consumption. Oil companies
imported 2.3 million tonnes of diesel in 2007-08 against 0.96 million tonnes in 2006-07. In the recent months of 2008-09, diesel demand is growing unabated at 22-25%.
The disconnect is thanks to the skewed pricing policy that is leading to cheap diesel increasingly replacing naphtha and fuel oil. While diesel is selling at Rs 42,000 per tonne, naphtha is selling at Rs 55,000 per tonne. Thus, naphtha proves to be an expensive fuel compared to diesel. Industry analysts say the subsidies being provided by the government (around Rs 22 per litre) is being diverted to consumers who can afford to pay the market price.
rajeev.jayaswal@timesgroup.com