[Bluengel180]

1. Denial 2. Anger 3. Bargaining 4. Depression
5. Acceptance ...
The 5 stages of buying petrol.

[ajman28]

Originally Posted by vina

First of all the oil companies do not pay spot prices - they buy most of their crude from long pre-agreed contracts, so spikes in fuel prices do not effect them as much. When the spot price was $140, the price paid by these guys may have been lower.

Are you sure about this? I thought the companies operate on spot prices.

[vinya_jag]

An 8% hike in petrol prices. Yes it will further go up a notch, Say 3.50 Rs in the next 2 months.
But that should stabilize at that price.

Why? Libiya which accounts to only 2% of the world oil does not supply any to the US.
It was only the predictions that took oil prices to $128 (Brent Cude CRUDE OIL PRICE: Oil | Energy | Petroleum | Oil Price | Crude Oil Charts | Oil Price Forecast ) per barrel in the past few months. No actual shortage was faced. India too buys from a few of these Oil suppliers and at these prices. And nothing from Libiya.

Will the prices rise again?
Not in the near future unless the US dollar weakens. If a few more countries go into political hangout in the future, say Bahrain/Oman, US would still buy its oil from Venezuela and Russia. There is enough competition among the oil producing nations to sell its oil at competitive prices.

Will it fluctuate drastically?
Yes only if Saudi/ UAE go down. That would be upto 20% of worlds oil and from countries that matter to India.

The outlook for the next 1 year is the same. Somewhere around 114$ per barrel.
It could also come down a few notches, but there will not be any respite in petrol prices as the oil companies in India will try and recover the money lost.

The govt was all this while spending a lot of us happy. The elections were a boon to us. Now that the elections are over, we will have to face the music.
No way back.

So, drive less, use mass transport, use bikes.

[Saanil]

Originally Posted by vinya_jag

An 8% hike in petrol prices. Yes it will further go up a notch, Say 3.50 Rs in the next 2 months.
But that should stabilize at that price.

Why? Libiya which accounts to only 2% of the world oil does not supply any to the US.
It was only the predictions that took oil prices to $128 (Brent Cude CRUDE OIL PRICE: Oil | Energy | Petroleum | Oil Price | Crude Oil Charts | Oil Price Forecast ) per barrel in the past few months. No actual shortage was faced. India too buys from a few of these Oil suppliers and at these prices. And nothing from Libiya.

Will the prices rise again?
Not in the near future unless the US dollar weakens. If a few more countries go into political hangout in the future, say Bahrain/Oman, US would still buy its oil from Venezuela and Russia. There is enough competition among the oil producing nations to sell its oil at competitive prices.

Will it fluctuate drastically?
Yes only if Saudi/ UAE go down. That would be upto 20% of worlds oil and from countries that matter to India.

The outlook for the next 1 year is the same. Somewhere around 114$ per barrel.
It could also come down a few notches, but there will not be any respite in petrol prices as the oil companies in India will try and recover the money lost.

The govt was all this while spending a lot of us happy. The elections were a boon to us. Now that the elections are over, we will have to face the music.
No way back.

So, drive less, use mass transport, use bikes.

All we can do is earn more or drive less. For me - I will be driving my car on weekends only and for the rest of the days I shall be fighting for space in public transport system. The onset of rainy season will make matters worse for public transport. Now I feel stupid buying a petrol car. While mobile calling rates are becoming cheaper and cheaper, petrol is going the other way round.

[misquitas]

With petrol (thankfully, the word "gasoline" is not used here on this thread) prices constantly going vertical, more and more petrol car owners are either regretting their decision to have bought a petrol car or are planning to severely curtail the use of their petrol car.

In either case, this may not be good news for team-bhp.com. Less/no use of petrol car....less/no views on team-bhp.com? Let's hope not.

Also, what I cannot understand is this: The government is more than happy to tax petrol and torment petrol car owners, but is more than willing to infuse thousands of crores into the struggling Air India.

[auto-one]

drmohitg, yes, in a way Rs. 500-600 hike in the monthly fuel bill may not be significant, but if you consider the fact that an increase in petrol price affects the prices of other commodities, this hike becomes significant. Secondly, for those in the low income group, even a small increase in the petrol price disturbs their monthly budget.
Increasing the petrol prices is not the only solution to check the losses incurred by the oil companies. Where does the tax paid on petrol by the common man go? Is there any system that monitors this?

[raghu]

Petrol price is not this high in any of the neighboring countries. Why is it so high in India? Because of the tax component. The govt is covering up its financial mess by burdening the common man with more tax. The excise income from Petrol is one of the highest for the govt. Given that the majority of the govt. money finds its way into private hands, it is another facet of this flawed financial policy. But what better to expect from our ministers who get free fuel allowances !!! Only if they were paying from their pocket will they know the pinch.

[sanjayk]

An Increase in fuel price is music to the government. They rake in money in terms of Excise duty, Customs duty and VAT. Fuel is the costliest in Hyderabad. This hike has brought it to approx. Rs 71.

Even if the international crude prices rises, what pinches us most is the amount of taxes that the government levies. If i am not wrong at least 33% of the fuel price that we pay goes toward taxes. Both Central and state governments are least bothered in reducing the tax burden. Till that time the only option left is to cut expenditure else where and pay more for fuel.

I wish the government focuses on bringing more people into the tax ambit, that way they would not look at fuel as a tax earning product. If only 2G scam did not happen and govt had the 1lakh crore rupees, they would have not hiked the price.

[azeemhafiz]

Originally Posted by sanjayk

An Increase in fuel price is music to the government. They rake in money in terms of Excise duty, Customs duty and VAT. Fuel is the costliest in Hyderabad. This hike has brought it to approx. Rs 71.

Even if the international crude prices rises, what pinches us most is the amount of taxes that the government levies. If i am not wrong at least 33% of the fuel price that we pay goes toward taxes. Both Central and state governments are least bothered in reducing the tax burden. Till that time the only option left is to cut expenditure else where and pay more for fuel.

I wish the government focuses on bringing more people into the tax ambit, that way they would not look at fuel as a tax earning product. If only 2G scam did not happen and govt had the 1lakh crore rupees, they would have not hiked the price.

WoW! looks like Bangalore and Hyderabad are on par with fuel prices.

Also over 50% of the petrol prices are in taxes.

[vina]

Originally Posted by ajman28

Are you sure about this? I thought the companies operate on spot prices.

A big amount of the crude they get is under long term contracts, there are mechanisms in that to account for some volatility, but the daily or even weekly variations do not matter much.

A big minority share (I believe between 25-35% - but don't have exact figures right now) is bought on spot markets - but they do hedge using commodity derivatives.


I read somewhere a long time ago (may be two years ago) that Reliance petroleum officials are savvier buyers - they are masters at buying distressed oil tankers etc. at discounts. Don't know how true it was then and how true it can be today.

[drmohitg]

Originally Posted by auto-one

drmohitg, yes, in a way Rs. 500-600 hike in the monthly fuel bill may not be significant, but if you consider the fact that an increase in petrol price affects the prices of other commodities, this hike becomes significant. Secondly, for those in the low income group, even a small increase in the petrol price disturbs their monthly budget.
Increasing the petrol prices is not the only solution to check the losses incurred by the oil companies. Where does the tax paid on petrol by the common man go? Is there any system that monitors this?

How does increase in petrol prices affects other commodities? Its infact the Diesel which is used in the transportation industry be in trucks or rails or even public transport autos and buses. Thats why Govt stays away from diesel most of the times.

The Indian political system is very complex. We also have to keep in mind that though we will be paying 500-600rs more on our petrol bills every month, we also save 350Rs on every cylinder of LPG we use. With the Diesel prices not being touched , you are saving a lot of money on everything from milk to vegetables to everything.

I do not say that this situation is ideal. Ofcourse the whole system of subsidies and reservations are flawed according to me. Also the govt should implement higher taxes on private diesel vehicles on an emergency basis. Because the price difference will only push more and more people towards diesel cars and thereby indirectly increasing the loss suffered.

[auto-one]

Originally Posted by drmohitg

How does increase in petrol prices affects other commodities?

Any hike in petrol prices increases inflation. You will very soon observe that there would be an hike in the rates of certain commodities, under the pretext of rising input costs. Just to give you an example, autorickshaw fares in Pune, which even at current rates are more expensive per km.wise than cars, are certain to go up further. And please note that there are over 20,000 autorickshaws in Pune and PCMC that run on LPG / CNG !!

[vebmetal]

While this is certainly a bit of a dark cloud when it comes to people on an individual level, I think there is a major silver lining in this that perhaps many people are not aware of. The state of affairs is such that compared to other areas of technology, there has been relatively little that has been accomplished in the last many decades towards increasing fuel efficiency of vehicles. As GTO and others have rightly said on this forum, people in the US were pampered with such low prices, that neither the people (save a minute amount of environmentally concerned individuals) nor the auto industry gave a damn about fuel efficiency. Now when petrol prices jumped from about $1.50 to $4 or so per gallon, we saw how not just people but the auto industry sat up and took notice and realized that the status quo could not last much longer. Compare this also with Europe where petrol prices are much higher than much of the rest of the world including India. In those markets we are seeing a new wave of innovation in electronic / hybrid vehicles as well as some improvements in petrol efficiency in cars.

I think we are in this position as well. For the last 10-15 years save the advent of the reva (and it's lackluster response in the market) not much was happening in the way of fuel efficiency. Sure, some manufacturers like Maruti and Hyundai etc. were making some decently efficient vehicles, but there wasn't any real concern or plan to revolutionize the industry or to take any big steps. The average car buyer was also not too terribly concerned with it (as demonstrated by the success of SUVs and sedan with 6-7kmpl mileage).

I think now in India we will see the rise of electric vehicles, hybrids, alternative energy source based vehicles etc. which in the end will not just benefit us individually but also the whole of society as a whole.

So at the risk of being flamed on this thread, I would dare say that the rise in petrol prices will eventually benefit society by weaning us away from fossil fuels. Rolling back on the petrol prices IMHO would be penny wise pound foolish and seriously short sighted on our part.

[drmohitg]

Originally Posted by vebmetal

So at the risk of being flamed on this thread, I would dare say that the rise in petrol prices will eventually benefit society by weaning us away from fossil fuels. Rolling back on the petrol prices IMHO would be penny wise pound foolish and seriously short sighted on our part.

I actually agree with that point to some extent. The rare day when there is no water supply owing to some maintainance issue creates a havoc in our daily routine. Agreed. But it does also makes us realise that on a normal day we waste so much water. Similarly people will tend not to waste too much fuel now. Everyone will think twice before taking there cars out at every possible occasion.

[mxx]

Originally Posted by vebmetal

So at the risk of being flamed on this thread, I would dare say that the rise in petrol prices will eventually benefit society by weaning us away from fossil fuels. Rolling back on the petrol prices IMHO would be penny wise pound foolish and seriously short sighted on our part.

+1 on this mate.

If the prices are like those in US or middle east we will waste fuel as foolishly as they do.

But I dont like the "weaning us away from fossil fuel" part. There is no fun in non-fossil fuel powered cars although it will do the job of taking people from point A to Point B