[sgiitk]

Finally figured out what Deregulated means. I think we all agree that Petrol is officially deregulated, but in practice it is not.

Now if an item is Regulated the OMCs can claim reimbursement, while for a Deregulated item they do not get any reimbursement.

[shadows123]

Originally Posted by sgiitk

Finally figured out what Deregulated means. I think we all agree that Petrol is officially deregulated, but in practice it is not.

Now if an item is Regulated the OMCs can claim reimbursement, while for a Deregulated item they do not get any reimbursement.

So basically the OMC's are screwed in terms of losses on petrol? They wont get any claims from the govt even though they restricted the revision of prices!! If i were IOC shareholders i would be pissed!!

[Hayek]

Originally Posted by shadows123

So basically the OMC's are screwed in terms of losses on petrol? They wont get any claims from the govt even though they restricted the revision of prices!! If i were IOC shareholders i would be pissed!!

Yes, but be pissed with the board of directors, who are violating their fiduciary duties, not the government. In fact consider suing IOC board members if you are a shareholder.

[shadows123]

Originally Posted by Hayek

Yes, but be pissed with the board of directors, who are violating their fiduciary duties, not the government. In fact consider suing IOC board members if you are a shareholder.

Cant i guess considering govt continues to still be the majority stakeholder in the OMC's and can influence policy decisions as well as lead it to bankruptcy if they wish!

[babu.sundaram]

Originally Posted by Hayek

Yes, but be pissed with the board of directors, who are violating their fiduciary duties, not the government. In fact consider suing IOC board members if you are a shareholder.

Originally Posted by sgiitk

Finally figured out what Deregulated means. I think we all agree that Petrol is officially deregulated, but in practice it is not.

Now if an item is Regulated the OMCs can claim reimbursement, while for a Deregulated item they do not get any reimbursement.

Petrol is deregulated. OMCs are "free" to change prices; so, no reimbursements on losses due to petrol.
Now, if OMCs are not increasing prices, they are incurring losses voluntarily.

IOC being a listed company, wouldn't this constitute a SEBI related violation?

Sorry, a bit !


BTW, I wouldn't expect them to keep delaying the prices regulations as everyone's treasury is drying up and with oncoming winter, oil is known to go up anyways making things worse for the "regulators".

[sgiitk]

With QE3 coming (after all Obama hs to pull out all stops to get elected), Brent Crude is expected to touch $120. The Dollar may slip a bit but then what will the scenario become? Too frightening to contemplate.

[sarthakgupta]

Cabinet Committee on Political Affairs (CCPA) to meet this evening to decide on diesel and LPG price hike.

"Radical decision need to be taken to check the burgeoning subsidy bill but again UPA and radical decisions don't go along easily," an oil ministry source said here.

They sell diesel at a loss of Rs 19.26 a litre, kerosene at Rs 34.34 per litre and domestic LPG at Rs 347 per 14.2-kg cylinder.

While diesel prices have not been revised since June last year, petrol rates were last hiked in July. A decision on raising petrol price will be taken after the CCPA decision on diesel, domestic LPG and kerosene.

Link:http://economictimes.indiatimes.com/...w/16348315.cms

[shadows123]

t looks like India’s government is again pushing back a decision to raise fuel prices amid political opposition to the move. But the government knows it will soon have to bite the bullet and raise prices, as huge subsidies to keep them below market levels have made the country’s budget deficit unsustainable.
Oil Minister Jaipal Reddy said the government may not discuss raising prices of diesel and cooking fuel at a meeting later Tuesday. That contradicts a story in today’s Indian Express that said such a decision was on the cards.
Mr. Reddy said the government will take a decision in the next few days. Still, the regular postponement of any decision shows the government’s tricky situation.
Mukul Roy, India’s railways minister, later told The Wall Street Journal that the panel meeting has been deferred. He didn’t say when the Cabinet Committee on Political Affairs — headed by Prime Minister Manmohan Singh and consisting of several cabinet ministers — would meet next, or why the meeting had been put off.
The main problem for the Congress party-led coalition is that not even its own allies such as Trinamool Congress, headed by the firebrand West Bengal Chief Minister Mamata Banerjee, and the DMK support such a hike.


But, the government is now running out of options. Any further delay in raising fuel prices will add to the stress on the federal treasury and put at risk the government’s fiscal deficit aim of 5.1% of gross domestic product for this financial year.
Mr. Reddy told reporters he has sent a note to a cabinet panel to seek approval for an increase in diesel and cooking fuel prices. He said the state-run oil marketing companies are set to lose 1.88 trillion rupees ($34 billion) in revenue in this financial year through March by selling diesel and cooking fuels at state-set, discounted rates

[tj123]

Oil companies making losses is all nonsense actually the P&L account of Indian Oil Corp reported a Net profit of 4K Crs (March 12), if government is saying oil companies are making losses it means they are not making much profit but certainly not losses.
Government should seriously reduce the taxes on fuel which is accounts to more than 50% of the fuel cost, by reducing the taxes the cost of fuel comes and will ease up the inflation.
By reducing taxes government will have less money for spending which is again good for all as that money never reaches the intended populated , it’s all siphoned off

[one-77]

Originally Posted by tj123

Oil companies making losses is all nonsense actually the P&L account of Indian Oil Corp reported a Net profit of 4K Crs (March 12), if government is saying oil companies are making losses it means they are not making much profit but certainly not losses.
Government should seriously reduce the taxes on fuel which is accounts to more than 50% of the fuel cost, by reducing the taxes the cost of fuel comes and will ease up the inflation.
By reducing taxes government will have less money for spending which is again good for all as that money never reaches the intended populated , it’s all siphoned off

This is a perpetual debate. The left wing economists claim that the oil PSUs are making huge profits, while the Government, the PSUs and right wing economists and analysts claim they're making huge losses. Being an illiterate when it comes to economics, people like myself don't know who to believe. With the CAG deciding to look into the claims of losses made by the PSUs maybe things will be clearer soon. One thing I've noticed though. My friends who work with oil PSUs certainly don't look or live like employees of ailing companies.

[SLK]

Originally Posted by one-77

Being an illiterate when it comes to economics, people like myself don't know who to believe. With the CAG deciding to look into the claims of losses made by the PSUs maybe things will be clearer soon.

With the recent calculations made by CAG, I think they are too illiterate! to even acknowledge their illiteracy, leave alone making any sensible calculations.

If Diesel is so critical to the economy, why not remove taxes on diesel. Oh taxes go under another ministry, which is looking at getting more money instead of losing any.

[sgiitk]

Latest. Core Group opposes price hike (for the time being!). According to Udyan Mukherjee the postponement may be till the end of the week, so that allies may be informed. I am sceptical as usual.

[shadows123]

Originally Posted by SLK

With the recent calculations made by CAG, I think they are too illiterate! to even acknowledge their illiteracy, leave alone making any sensible calculations.

If Diesel is so critical to the economy, why not remove taxes on diesel. Oh taxes go under another ministry, which is looking at getting more money instead of losing any.

Think the Centre has already done its part on removing excise duty on diesel. The current excise duty is around 2Rs compared to 15Rs on petrol. The huge windfalls made are by the respective state govts on every L of fuel. So, even if the centre were to ask to remove taxes, the greedy state govts wont !

[Ford5]

I've stopped thinking about these price hikes. We never get what we pay for (shell is 5 bucks extra). Just fill it up, regulate the throttle such that the engine does not stall & isn't lugging in the lower gears.

It works wonders. But it does involve more use of the left leg, which i believe is a good trade off for much much better fuel economy as against regular A/c usage + lesser gear shifts.

Do we cry so much when water bottle prices are increasing by 1-2 bucks every month?

I'm trying to use the same reasoning to fool my brains into not freaking out, and have changed my driving / riding style to go with the same.

[sgiitk]

@Ford5; What is worrisome is the damage being done to the economy by not increasing fuel prices.