[Vishesh]

I would be the happiest person on earth if the delhi govt. bumped up diesel pricses for ALL cars to around Rs. 75/liter. lol
I own both petrols and many of my friends who just purchased a DDiS keep boasting of their Rs.2/km running costs. Boy, it leaves me red in anger..

[maddy42]

Absolutely pathetic way for the govt to think of such a move. Bunch of loosers who sit in bloody space and dont know ground realities man. Pathetic. Next what extra tax for a person who owns a car huh

[breezydrive]

Yes!
A day before Y'day i read this in TOI, PM has asked Mr. Murli Deora to formulate a plan so that industrial users & the diesel car owners can be charged more. The idea being that only farmers should benefit from the subsidy on diesel & oil companies can come out of the blues!

Though it may not happen imdtly. but within a couple of years the plan might get implemented.

So, does that mean, a prospective buyer of a diesel car should:
Re-do the thinking/ calculations ( Break- even cost petrol Vs diesel, etc.)
OR
Think of buying petrol vehicle only & thus save on running (maintenance as well ) costs.

[GenuineOptimist]

See ours is a country that is run very badly even now. Where-ever government still exists, there is undersupply because market forces are not operating.

Simple economics would say that if demand exceeds supply the price should increase thereby reducing the demand. In turn, because of increased prices the supply would increase subsequently (more profit to be made) and become equal to the excess demand in due course.

Look the electricity story. Its exactly similar to diesel story. Cost of electricity generation is Rs. 5/- to Rs. 10/- per unit, depending on hydro/coal/nuclear.. but the prices are constrained at Rs. 1.50 or Rs. 2 depending on which state you are in. Because of the subsidy, electricity demand is increasing at 30% per annum while supply is not growing. After all, even government electricity companies doesn't want to incur losses by selling power at less than cost to government.. Ridiculous situation, but exactly similar to diesel.

Thank God we are moving away from a regime that controlled the prices of sugar, cooking oil, rice-wheat, condom and sex. Welcome to the decontrolled liberalized India.

If BJP comes to power in 2009, the first thing they are going to do - is to decontrol oil prices, electricity prices and reform other sectors but in steps. Left idiots have put us back by 5 years.

[ph03n!x]

Wow! Lets not talk politics here

[GTO]

Even the consideration of such a move shows the foolhardiness & limited vision of some of our policy makers. For one, it is impossible to implement. How are they going to price their supply? And what's going to stop a retail outlet from selling diesel at the "farmer" price to a Swift diesel owner, and pocket the difference?

Would work great in an ideal world. But we clearly aren't living in one.

[GenuineOptimist]

And what's going to stop a retail outlet from selling diesel at the "farmer" price to a Swift diesel owner, and pocket the difference?

I don't understand what you are saying.
If there are two products, one colored in blue for farmers and the other almost-colorlessly-green normal diesel for swift owners, then how can the retail outlet cheat?

If the outlet claims that they sell all the diesel to farmers thereby showing less sales revenue, then they must have only procured the blue farmer diesel by paying less too. They can't claim that they buy normal diesel thereby paying more and sell blue diesel thereby selling less and show less profit. Won't work.

Implementation is not a big problem. Corruption is. But that shouldn't stop government from moving ahead, for the simple reason that corruption is everywhere and not just in oil.

[joslicx]

Originally Posted by maddy42

Absolutely pathetic way for the govt to think of such a move. Bunch of loosers who sit in bloody space and dont know ground realities man. Pathetic. Next what extra tax for a person who owns a car huh

How is it pathetic to think of such a move? Why should car owners (who are wealthy enough) enjoy hefty subsidy on fuel? Nearly all the luxury cars nowdays are run on Diesel. A person driving a Mercedes should pay full for the fuel he is using but in present case they enjoy such a huge subsidy. Thats outrageous and wrong and equivalent to robbing poor and giving it to the rich!!! A fuel like petrol that is primarily used by two wheeler owners (so the poorer than car-owner section of the population) is much more expensive than diesel thats used by cars or societies for power backup (so the rich users in effect). Its morally and fundamentally wrong.

I can understand ur apprehensions about implementing differential pricing but why berate the govt for thinking about such a move??? It is a step in right direction.

[GenuineOptimist]

Originally Posted by ph03n!x

Wow! Lets not talk politics here

I'm not talking politics. If I had requested people to vote for BJP enumerating the reasons why they should, then it is politics.

I'm just guessing what might happen after polls. If you notice carefully, my sentences about the party started with a "IF".

And the comment about left, well, I think it is a fact and not my opinion. Facts are facts be it from any realm.

[srinivasmhn]

I do not think the duel pricing can be implemented. The other option is increasing the tax on diesel cars. This will help even the potential diesel buyers to do some maths and decide if they really need to by a diesel car. May be for the hatchbacks the tax can be lower. But for luxury vehicles the tax needs to be doubled.
No offence, even I have diesel car and my driving has increased very much as no good public transport is available. Also if the cost taken into consideration the amount I need to pay for my company transport costs another Rs 1500\- more. Even companies need to make the transport attractive so that they can restrict the daily car users.

[hvkumar]

The reason why Diesel is cheaper than Petrol in India is: (a) 3 times more diesel is consumed compared to petrol, (b) petrol is for only transport segment, but diesel is also for power generation and business use (pumpsets, gensets, etc), (c) the transport industry and railways run on diesel, and increasing cost there would result in inflattionary spirals.

I is just a good opportunity to run diesel in cars, which in any case is a miniscule market. Any increases in prices of diesel are being resisted in the anme of causing inflationary pressures.

Having said this, fuel has to be priced like any other commodity - cost plus. Today, all fuels are being sold at below cost (including petrol). The way things have deteriorated, there will soon be (a) no petrol or diesel available in pumps, (b) no funds for funding expansion of capacity. We are already seeing a similar situation in the Fertiliser industry where decades of subsidised pricing has (a) made fertiliser industry unattractive business, (b) left the producers in a bad financial shape, they neither have incentive nor funds to expand, and (c) there is acute scarcity of fertiliser.

So, if you want India to have enough petrol and diesel, the urgent need is to move back to the de-administered pricing regime and let retail prices be determined by market forces.

Look around the neighbourhood -Pakistan, Sri Lanka, Indonesia - some dismissed as poorer or less developed countries compared to India - they all price fuels at cost plus, unlike India which is the most backward and unreformed country of the lot.

And please stop comparing India with western countries, where diesel is used mainly for transport - here, petro fuels are the main source of energy, power generation.

[reignofchaos]

Originally Posted by hvkumar

Having said this, fuel has to be priced like any other commodity - cost plus. Today, all fuels are being sold at below cost (including petrol).
So, if you want India to have enough petrol and diesel, the urgent need is to move back to the de-administered pricing regime and let retail prices be determined by market forces.

You have it all wrong here. Indian prices of petrol atleast are higher than the world standard. While the refineries are making losses at roughly 3 rupees or so per liter of petrol sold, the government(both the state and the central) is pocketing a significant amount as taxes on every liter of petrol sold. This is not true for diesel which definitely is being sold for huge losses with hardly any taxes.

[mjothi]

Originally Posted by srinivasmhn

I do not think the duel pricing can be implemented. The other option is increasing the tax on diesel cars. This will help even the potential diesel buyers to do some maths and decide if they really need to by a diesel car.

Oh no. Don't even think of this. How many taxes we will keep introducing? (No, I own a petrol car )

Originally Posted by srinivasmhn

May be for the hatchbacks the tax can be lower. But for luxury vehicles the tax needs to be doubled.

Its already in there. Check the percentage of road tax for each segment.


With so MANY taxes, finally it will become like Singapore where you can only dream cars

[tsk1979]

Andher Nagri Chaupat Raja,
Taka Ser Bhaji; Taka Ser Khaja

The F.Ministry is bumbling with inflation, deficit etc., etc., and with elections looming they are looking at such silly things rather than the right thing.

But for luxury vehicles the tax needs to be doubled.

Why?
Is it a crime to be able to afford luxury? What next. Buy an expensive house so pay 50% as registeration fee instead of 5%?
Earn more salary, pay 50% IT instead of 30%?

Let me tell a "joke"

When Communism came to Russia, there was lot of upheavel and worry among the masses with rumors afloat that you will lose everything.
So agents of the regime went to poor farmers to explain.
They met Ivan, and tried to explain him the virtues.

Official : Farmer Putin has 3 cows, farmer Ivan has 1, we give one cow to farmer Ivan, Da?
Ivan happily : Da Da
Official : Farmer Putin has 3 acres of land, farmer Ivan has 1, we give 1 acre to Farmer Ivan, Da?
Ivan even happier : Da Da Da
Official : Farmer Putin has 3 hens, farmer Ivan has 1, we give hen to Farmer Ivan, Da?
Ivan : Nyet!
Official(again) :Nyet...? Why? Farmer Putin has 3 hens, farmer Ivan has 1, we give hen to Farmer Ivan, Da?
Ivan: Violently, Nayet Nayet Nayet
Official : But Why?
Ivan : Because Farmer Ivan has 3 hens and Farmer Putin 1

So when all else is failing, losses of oil companies are rising, the FM has come with a plan. Rob the rich to give to the poor.
Earlier this was done with Petrol. Petrol car owners were paying for fuel of diesel car/truck bus owners
Now with differential pricing, people with cars will also pay for Black marketeers riches!

A lot of people say welcome welcome and we will have to ensure implementation.
I say Bravo guys, first you go and implement no Kerosene in petrol/diesel, and then come back here. But while you are doing that do take life insurance, as Manjunaths are not rare in this country

[joslicx]

Originally Posted by tsk1979

Is it a crime to be able to afford luxury? What next. Buy an expensive house so pay 50% as registeration fee instead of 5%?
Earn more salary, pay 50% IT instead of 30%?

No not a crime but u pay for luxury!!
We already pay more income tax (30%) if we earn more. And it makes sense. You cannot tax poor poeple otherwise they would not be able to afford anything in life let alone any luxuries.