[ethanhunt123]

Originally Posted by ottocycle

Don't be surprised if petrol prices are hiked again..

Fuel retailers like HPCL pushing for Rs 1.82/litre petrol hike - The Economic Times

Time to buy a cycle I guess If this love towards petrol car owners continues like this, Honda will have to shut shop in India

[karty_83]

Yet another price hike Where is all this heading to ?
Is there anything at all a common man can do to curb this ?

[cingsman]

Great! So, Petrol to go up by 1.82 and new Diesel cars are being looked at like a juicy lemon to be squeezed by imposing "fuel-parity tax".

I am absolutely hating myself these days since I bought my i20 petrol at 63 rs./ltr and now its 72 Rpl going to go up to 74-75 Rpl!!!

Sigh!

Can the common man do anything in this regard? Yes not as a solution but more as a "I need to be heard" project. It needs a mass movement a la Anna Hazare. Minimize usage of Petrol. Crash the demand. Screw up the supply-demand equation.

Maybe the Govt. will wake up to our woes

[Cheiron]

Originally Posted by bharatbs

Here is one possible solution to the problematic fuel pricing:
Why not allow petrol and diesel to be unifomly priced and allow subsidy eligible brackets (public transportation/agriculture/fleet operators) to claim re-imbursement directly from the governement at a later stage by producing Bills/UID/Vehicle registration. This can be implemented in phases so that its impact is slowly felt.
Clauses:
1) Transportation sector:

• There should be a monthly/weekly limit on diesel purchase for each vehicle.
• These vehicles should be equipped with a GPS unit (most of them are already equipped) to justify diesel expenditure.
• The GPS unit should be a tamper proof one

2) Agriculture sector:

• Should be given alternative energy subsidies (like power subsidy) to compensate for usage of Diesel in pumpsets/generators.

Thoughts/Opinions?

"RENT SEEKING" ACTIVITIES
In general, when there are subsidies via differential pricing of the same product, there will be "rent seeking" activities (i.e. lobbying, black marketing, corruption etc. where those denied subsidized pricing try to gain it outside of rules and regulations.

Differential pricing of the same product would also require enforcement mechanisms (like the ones mentioned in @bharatbs post above) which cost money that could be better utilized elsewhere - e.g. solar lighting in remote villages not adequately serviced by electricity boards.

"PERVERSE EFFECTS" OF SUBSIDY
Further, there would also be "perverse effects" i.e. increased harm to society that society as a whole would pay to subsidize. One should not forget that though many diesel passenger cars provide greater fuel efficiency per liter of fuel used and release less CO2 than their petrol counterparts, diesel combustion introduces more particulate matter and nitrous oxides (NOx). The latter causes greater soot buildup and smog incidence. Not only do NOx cause greater climate warming, the particulate matter increases the incidence of asthma in children and elderly and potentially increase cancer risk and sterility in 18-55 age group.

So the cost of subsidizing diesel is not just the price support that the Central govt. provides to OMCs from the taxes paid in by all, but also the increased health costs and suffering of all of us who have no choice but to breathe to exist.

ALTERNATIVE: DIESEL ENGINE TAXATION
So in general it is not a good idea to have a two tier system for diesel. It would be better to increase taxes / excise duty on new diesel passenger vehicles (cars, SUVs) and impose an additional registration tax for renewal of registration of existing passenger vehicles (cars, SUVs) than introduce a two tier pricing system for diesel. This would make diesel consumers pay for the true cost of diesel, rather than the subsidized cost under the current regimen.

Incidentally, the agriculture sector already receives free to low-cost power in several states, so alternative fuels subsidy to wean them off diesel for pumps may not work well in the short-term (though it might have beneficial effects in the long-term).

Originally Posted by simplyself

Even now the quantum of diesel used is more than that of petrol. So, the frequent and sizeable increase in the price of petrol is not exclusively dependent on the quantum of it being sold.

.... According to various reports, the price of diesel without the so-called subsidies may increase from Rs.5-odd to Rs.7-odd. Even after that the diesel price is lower than that of petrol.

Another factor is lower taxes the diesel attracts. Increasing the taxes may bring diesel at par with petrol. This is a far fetched scenario.

The only thing relevant, without burdening the OMCs and the consumer, is to lower the taxes.

TILTING THE MARKET
I am not sure making diesel cheaper is a good idea in the long-run (see some observations above). It tilts the market towards more dependency on diesel as fuel of choice. It might be better to gradually eliminate the Rs 5-7 per liter subsidy. This would help wean the market off of cheap diesel over time.

In theory, this would also ease the upward price pressure on petrol that the OMCs are economically forced to put to make up diesel. However, it is unlikely that would happen as OMCs have other fuels (CNG/LPG, PDS kerosene) etc. that they are forced to bear some subsidy. So petrol will continue to be milked to pay for subsidies on CNG/LPG and PDS kerosene.

[Fordmanchau]

Las time, I filled up at shell at Rs. 76.75 a litre in Hyderabad. PSU price was Rs. 74.40. My car feels better , less engine noise, better pick up, etc.

I think best way to teach these govt. backed oil companies is by shifting to private companies like shell and drain their business. Might as well let Shell benefit.

But oh no!! govt. will take this as a indicator of "capacity to pay" and will further jack up the price

[informmaha]

tired of seeing this news every now and then.

I suppose PSU's have a target set this year at Rs.100/L and that's how these hikes are heading to. I think there is not need for car manufacturing companies to manufacture petrol cars with these constantly increasing price hikes. There was a time, not very long ago I used to fill petrol for 1700-1800 for a full tank, but now the same costs 2300-2400 in just an year and in another year who knows I might be filling half tank petrol for the same cost.

[Tats07]

Rumour has it that finally (possibly it will still take another 2-3 years) the price will touch Rs. 100. I have couple of friends who are well connected to the PSU oil companies, and apparently that is what is doing the rounds these days.

I feel it is also upto the central government to rein in the states to stop levying additional taxes. Karnataka possibly has highest state levy, and these taxes increase the final price to consumer. I remember a calculation in the papers on how these keep on increasing the final price tag. How else does one justify highest petrol prices in India in South Asia? Even places like Bangladesh have petrol prices in INR 40s range.

[moinakg]

Originally Posted by Cheiron

"PERVERSE EFFECTS" OF SUBSIDY
Further, there would also be "perverse effects" i.e. increased harm to society that society as a whole would pay to subsidize. One should not forget that though many diesel passenger cars provide greater fuel efficiency per liter of fuel used and release less CO2 than their petrol counterparts, diesel combustion introduces more particulate matter and nitrous oxides (NOx). The latter causes greater soot buildup and smog incidence. Not only do NOx cause greater climate warming, the particulate matter increases the incidence of asthma in children and elderly and potentially increase cancer risk and sterility in 18-55 age group.

Making an OT comment here but modern diesel engines have a lot of advancements that tackle these pollutants. AFAIK apart from lesser CO2 and CO, EGR engines should reduce NOx to levels even lesser than that of some petrol engines. The big unfortunate downside is increased particulates like soot that are of large sizes to be visible as black smoke. Particulates from petrol engine are there but are too small to be visible.

I think this aspect of petrol vs diesel should be an interesting topic for another thread.

[vijaycool]

After looking at the pricing chart its very evident from 2010 onwards the price difference between petrol and diesel widens close to Rs 28. Govt cannot please one community and burden others. Earlier if the govt. increases the price by 25paise there will be bandh (ofcourse by opposition party)but with such kinda increase one day comman man himself will strike for survival.
Regards,
Vijay

[nanduchitnis]

I have just returned from USA where petrol price is $ 3.80 per gallon and converted the cost is around Rs 47/- per liter. Why are we being skimmed off?

For a retired man like me paying Rs 73/- per ltr of fuel is unstainable for my Honda City for which I am paying an EMI of Rs 7,500/-per month.

I am looking to exit out of the petrol route and go for a diesel car.

It is high time that Diesel prices are rationalised to bring down Petrol costs to consumers as in USA.

It has become hard to survive in this country given the inflation costs on food, security, housing and much else.


The subsidy that the SUV owners get with diesel engines is irrational for Petrol car owners. Already pertol car sales have dropped alarmingly. Even small hutch backs are now offered with Diesel engines.

[Cheiron]

Originally Posted by nanduchitnis

I have just returned from USA where petrol price is $ 3.80 per gallon and converted the cost is around Rs 47/- per liter. Why are we being skimmed off?

For a retired man like me paying Rs 73/- per ltr of fuel is unstainable for my Honda City for which I am paying an EMI of Rs 7,500/-per month.

I am looking to exit out of the petrol route and go for a diesel car.

It is high time that Diesel prices are rationalised to bring down Petrol costs to consumers as in USA.

It has become hard to survive in this country given the inflation costs on food, security, housing and much else.

The subsidy that the SUV owners get with diesel engines is irrational for Petrol car owners. Already pertol car sales have dropped alarmingly. Even small hutch backs are now offered with Diesel engines.

Petrol prices are higher here due to taxes and levies on top of the price of the fuel that end up subsidizing other energy users and govt. programs. The subsidy is not just SUV owners. It is also for owners of big and small cars.

Petrol is much more expensive due to both Central and State levies. Petrol consumers are subsidizing diesel, PDS kerosene, LPG/CNG and a whole host of state govt. initiatives depending on which state one lives in. At one time (i.e. decades ago) petrol levies were justified as only wealthy could own cars and consume petrol. As cars became both more affordable (due to rising incomes) and desirable for the middle-class they ended up playing a part in subsidizing. Eventually, petrol prices are going to go high enough that only the wealthy can use them for cars and all the scooter/motor bike users will end up subsidizing the SUV and car owners. Gives a new meaning to "perverse incentives" phrase popular with economists.

[headbanger]

I was about to write "It is shameful for govt to act like this" but then words like govt and shame are synonyms.
I cannot leave my petrol car and buy a diesel. It is not a proposition which is financially advisable. I will lose approx 1L on my year old car since resale for petrol cars has gone down with the spiralling price rises in petrol. Then I will pay an extra premium of 1.25L-1.5L for purchasing the same car in Diesel variant. To recover this 2.25L, how many kms will I have to churn before I draw level? I am between the devil and the sea. The only thing I can do is to bring down the kms I drive and be at the mercy of govt transport which in any case is pathetic at least here in Gurgaon. You pay 28 Rs for metro to go from Delhi Kashmere Gate ISBT to Gurgaon and then pay minimum 100 Rs to go to your home from metro station. Do it 10 times a month and you have given 2000 Rs (1000 Rs Up + 1000 Rs down) to auto-rickshaw for a 5KM ride.

Damn!!! Wish if I also got appraisal like petrol prices. Always going up and up without even thinking of my performance. The prices will rise only upwards irrespective of factors like cost per barrel, rupee depreciation etc..

[yogesa]

Petrol prices to rise again.

The public sector oil retailers, under pressure due to continued volatility in global crude oil and product prices coupled with fluctuations in exchange rates, are considering a possible petrol price hike.

Hindustan Petroleum Corporation Ltd, Director (Finance), Mr B Mukherjee, said: “We are at present losing Rs 1.5 a litre on petrol…To make up for this loss a desired increase in retail price should be at least Rs 1.82 a litre.”

Link - Business Line : Companies News : PSU oil retailers mull petrol price hike

[yogesa]

NEWS Source - Business Line : Companies News : PSU oil retailers mull petrol price hike

NEW DELHI, NOV 1:
The public sector oil retailers, under pressure due to continued volatility in global crude oil and product prices coupled with fluctuations in exchange rates, are considering a possible petrol price hike.

Hindustan Petroleum Corporation Ltd, Director (Finance), Mr B Mukherjee, said: “We are at present losing Rs 1.5 a litre on petrol…To make up for this loss a desired increase in retail price should be at least Rs 1.82 a litre.”

[scopriobharath]

I wonder why the politicians just care about the Business class and not the common class. By raising the price for a handfull of business honchos, The whole common class which uses fuel is taxed.

I dont think there is a single luxury in India that you can have without paying tax with White money. I think i must think of ways to make black money so that i can counter the inflation. Indian government looks at the average indian as if it is crime to be born itself in india and impose so may taxes. Now a days having an own vehicle (2 or 4 Wheeler) is a neccesity and no more a luxury. Goverment must provide a gratitude rather than taxing at every available oppurtunity.

I dont think the government will be satisfied even if there is a 50% new tax imposed for diesel vehicles. Assume they have increased 20% tax for Diesel vehicles (over and above existing prices). Do you think, govt will stop fuel price rise for at least an year. NO they will not. They will charge the absurd taxes on Diesel Motors and also keep increasing the fuel prices stating some reason like rupee weakens, dollar higher, barrel price rise in USA or bring in some new tax like fuel usage tax on Petrol/Diesel/CNG.