[JediKnight]

Originally Posted by akj123

I think govt. + OMC are just trying to hoodwink people by making these subsidy statements - reality is the amount collected in tax is far greater than any subsidy element. It seems govts are dependent on this easy tax source, and not willing to reduce it.

Well said. Government uses the word "subsidy" to fool the common man. First they tax the fuel fuel heavily and then regulate fuel prices causing a "loss" by the oil marketing companies. The "loss" is then compensated by the same tax revenue. It is like somebody robs you of 100rs and then returns back 5rs as "subsidy".

[sahakar]

There are multiple factors affecting prices and with the rupee depreciating adding to the factors.

Taxes are indeed high but I feel taxes should remain high so that people have some incentive to be more efficient.

The oil cos too need to be transparent in how they calculate the notional losses. Currently its is totally opaque. How can three different companies with difference economies of scale keep the same petrol prices is something the Competition Commission of India should look at. This is by far the biggest cartel in India.

My another grouse is you cannot keep on increasing one type of fuel for ever and keep the others subsidized aka diesel and kerosene. All have to be priced rationally and the users needs to pay whatever the production price is.

Do you know diesel prices are kept low not due to farmers and transporters but rather for the big industrialists. They use diesel much more than the farmers and transporters to run their factories. And finally its us middle class tax payers who are subsidizing them. Can you see the irony in us poorer people subsidizing the billionaires.

Cheers

[avisidhu]

Based on the current prices, Price of petrol in Punjab should now be more than twice that of diesel. Any other state with such huge discrepancy?

[akhilesh]

Originally Posted by drmohitg

So you are comparing 2002 with 2011? Thats not a realistic parameter to judge BJP's performance at all. Anyways lets not discuss politics here.

No I am talking about rate of inflation. Even if we were to compare the years 2002 and 2011, also factor in the increased demand, better produce owing to better farming practices which should have compensated for the higher cost of other things... or in other word economies of scale.

Originally Posted by drmohitg

Yea I agree the govt's approach towards certain issues has been little arrogant. But one thing is for sure that oil companies are losing money each day. Blame it on subsidies on other stuff or taxes or whatever. The problem is that even if rupee loses its value and crude remains low, the price hike will not be rolled back as they would want to cover up there losses from previous years. Its a kind of vicious circle we consumers have got into.

Honda better get those diesel engines fast or they will again lose market share.

What subsidy are you talking about? More than half the cost of petrol is because of taxes and the quantum of taxation remains the same so if the price of petrol goes up, government's income from taxes also goes up. As a simple example if the government earns 100 rs from taxes on fuels and pays Rs 50 to oil companies as subsidy... they are still earning Rs 50!

[Swanand Inamdar]

In Pune the petrol prices are retailing at Rs. 71.97 a litre. Ridiculous indeed. I think it's time, Government had a serious discussion on this crisis. If it goes this way, a day wouldnt be too far off where we fill fuel for Rs.100 a litre.

Time has come where, we start a thread to discuss "What cycle" thread .

[drmohitg]

Originally Posted by akhilesh

What subsidy are you talking about? More than half the cost of petrol is because of taxes and the quantum of taxation remains the same so if the price of petrol goes up, government's income from taxes also goes up. As a simple example if the government earns 100 rs from taxes on fuels and pays Rs 50 to oil companies as subsidy... they are still earning Rs 50!

I was not just seeing petrol economics. Our whole system is flawed. You give benefits in 5 different things and increase the taxes on 5 others. I am no expert but where does the govt get that Rs 400 subsidy they are giving on every lpg cylinder? Ultimately you have the same amount of money. Its just how you wanna play with it and clearly successive govts have always considered cars as a luxury and hence happily increased petrol prices.

[torquecurve]

The issue here is that most two wheelers use petrol (well almost every two wheeler). Due to the lack of basic public transport and timing issues most people use their personal motorcycles and cars for getting around.

I second the thought for the what cycle forum!

It is time that the government reduced subsidy on diesel or introduce a use based diesel policy (which will lead to black marketing though).

Or better still - all Fuel should be open market priced and vary based on cost of crude.

[GTO]

On a lighter note, here's the latest buzz amongst bankers : Loans against petrol

With petrol prices being how they are, and RBI hiking interest rate by 25 points, the car market is in for a royal shakeup. While larger manufacturers might have to correct their forecast for the coming quarter or two, the smaller ones especially will be hit severely.

[drmohitg]

Originally Posted by sahakar

Do you know diesel prices are kept low not due to farmers and transporters but rather for the big industrialists. They use diesel much more than the farmers and transporters to run their factories. And finally its us middle class tax payers who are subsidizing them. Can you see the irony in us poorer people subsidizing the billionaires.

Can you tell me the source of that info? I was under the impression that the bulk of diesel subsidy goes towards transport.

[lurker]

Originally Posted by Swanand Inamdar

Time has come where, we start a thread to discuss "What cycle" thread .

Originally Posted by torquecurve

I second the thought for the what cycle forum!

actually cycles are not the way to go. It's horses.
They can also be parked where the cars used to be parked and can also be used for rough roads and off-road.

the 'economy' gave us cars, & now the 'economy' takes it away. Stop worshipping these false gods. We need to get back to our roots.

[souravc]

Originally Posted by GTO

On a lighter note, here's the latest buzz amongst bankers : Loans against petrol

That would be the first loan product based on an evaporating collateral
The RBI hikes and the general credit environment are hitting auto ancillaries hard - I don't see the logjam of order backlogs to vanish too soon since the auto ancillary guys are not getting bank funding to expand operations.
Sept month looks like would be a month to forget for car sales - on the positive side, buyers with enough equity of their own can squeeze out great deals

[sahakar]

Originally Posted by drmohitg

Can you tell me the source of that info? I was under the impression that the bulk of diesel subsidy goes towards transport.

I was under the same impression but thats not the case. I had read a couple of articles somewhere on this some time ago. Can't find the links but the gist was around 30% Industry, 30% farmers (I guess here too it would be rich farmers taking most of the advantage) and 40% transportation including railways

I am sure now with the prices increases of other fuels like naphta, even more diesel would be used more by industry.

Cheers

[raghu.t.k]

When I started riding my dad's 2 wheeler the cost of petrol was only 15, and I used to think twice to put anything more than Rs.50 worth of petrol. Today, that would not even get me 1 litre.

I am not sure how the govt can give a blatant lie, stating it due to the slide of the rupee against the dollar. Dont they have forward contracts on the exchange rates, or do they do it on the spot rates! And the current PM was once a finance wizard. I think its a story of too may cooks spoil the broth. We have Manmohan, PC, Pranab, Montek Singh all sitting and wondering how next should we stifle the citizens!! High time to vote these guys out.

[adimicra]

Can someone tell the shell price in Hyderabad?
I was wondering if it more or less than the PSUs.

What about Bangalore?

[Trust_In_Thrust]

Originally Posted by raghu.t.k

When I started riding my dad's 2 wheeler the cost of petrol was only 15, and I used to think twice to put anything more than Rs.50 worth of petrol. Today, that would not even get me 1 litre.

I am not sure how the govt can give a blatant lie, stating it due to the slide of the rupee against the dollar. Dont they have forward contracts on the exchange rates, or do they do it on the spot rates! And the current PM was once a finance wizard. I think its a story of too may cooks spoil the broth. We have Manmohan, PC, Pranab, Montek Singh all sitting and wondering how next should we stifle the citizens!! High time to vote these guys out.

We all think Manmohan was the man behind the economic turnaround of India.Well it is not him but Yashwant Sinha who had drafted the policies in prior government but before could be implemented lost power. Congress just used that draft and implemented.
Even today in parliament debates we all see the strong sensible approach Yashwant Sinha keeps in economic policies.

Originally Posted by drmohitg

Can you tell me the source of that info? I was under the impression that the bulk of diesel subsidy goes towards transport.

I can tell you for sure one major automobile manufacturer in Haryana was running complete plant on Diesel Generator for about 8 years till it finally had to move to Power Grid due to rising demand about 1 years back.