[neofromcapone]

Increase in fuel prices now, result huge backlash from opposition parties, and anyone else wanting their 15 secs of fame.

They will increase the prices till the deficient is recovered and the Ratings are stable.
Come Jan 2014, by which time the Rupee will stabilize and should be around 48/-, the fuel prices will be brought down and an election will be won.

The cycle will continue till the next general elections.

An earlier post of mine had a similar view


I have added the Dollar exchange rate since 2000 to the chart made by on another thread *Attached* : Fuel cost calculator, including a comparison between Petrol & Diesel here Delta Wing on 21st May 2011, 13:49


The lowest dollar rate is on Jan 11 2008 and I could not find the fuel prices on that date, hence used Feb 15 2008.

The highest rate is on record is Jun 18 2012. and you can see the difference in the fuel prices

[rajshenoy]

They have learnt the trick to manipulate Common mans memory. Increase now and decrease later. But isnt that everyone doing ?

Its business strategy. Get 25% free or like these auto makers do, increase the car prices and then throw more goodies and offers.

Why do you think opposition is fuming ? because they are concerned about People falling for the trap and voting for UPA again. Everyone keeps shouting on the news channel about why the prices are being increased. but no one suggests alternatives.

[sarthakgupta]

Finance Ministry for export parity pricing of auto fuels:

This will lead to about 10% reduction in fuel prices

In a major policy shift that would bring relief to fuel consumers and the economy but shake up the domestic oil retail market, the finance ministry has asked petroleum ministry to price motor and kitchen fuels at export parity.

The directive, if accepted by the petroleum ministry, could reduce fuel prices by some 10% or more and bring down the government's oil subsidy by Rs 18,000 crore.

Motor and kitchen fuels are now priced at trade parity, or an average of import and export prices in the ratio of 80:20, respectively. Import price gets a heavier weightage directly in proportion to India's oil imports, which stands at over 80% of its needs.

Source: http://economictimes.indiatimes.com/...w/18233735.cms

The Finance Ministry has informed the Petroleum Ministry that auto fuel need to be priced at export parity rather than import parity as the 2.5 per cent customs duty was adding to the under-recoveries of the state-run oil marketing companies without contributing any revenue to the exchequer.

Sources said Indian Oil, Hindustan Petroleum and Bharat Petroleum together are projected to end the fiscal with close to Rs 1,60,000 crore of under-recoveries or revenue loss on selling diesel, domestic LPG and kerosene below cost.

Upstream oil companies like ONGC are to meet about Rs 60,000 crore of this and the rest Rs 100,000 crore was to come from the government as cash subsidy. By changing the pricing methodology, the Finance Ministry wants to cut its cash outgo by about Rs 18,000 crore in the current fiscal.

Source:http://economictimes.indiatimes.com/...w/18226256.cms

[sgiitk]

Now expect a hike in fuel prices.
http://economictimes.indiatimes.com/...w/18288697.cms
In many ways Jet Fuel (ATF - really Kerosene) is the bellwether. Now we can expect Petrol, Bulk Diesel, Unsubsidised Gas all to go up.

[sgiitk]

I am expecting a 5% or so hike very soon. The reasons are

1. Brent has crossed $117 and looks to be heading for the predicted $120. Also, NYMEX/WTI to Brent differential after dropping to $16 has again inched up to $21.
2. Part of this increase is cushioned by $ at about Rs.53.50 (had momentary dropped under 53) from the 55.25+ when the monthly price hike (diesel) was announced.
3. ATF is up by Rs.1.8 per litre.

The only saving grace is that the FM wants to use Export price parity for calculating the under recoveries instead of the Trade Price used by the Oil Ministry at present. Trade price is Import:Export in a 80:20 ratio. I suspect the final figure may become more like 60:40 at the end of the day. Needles to say Export price is lower than Import. This gives a hint of some cross subsidies in the system!

[lurker]

but you forget:

entire lot of fuel consumed in India isn't imported. 30% is produced in India itself.

We buy another 30% from Iran, and pay them as per long term contract. Also deffered payment.

Only rest is imported at spot prices.

[sgiitk]

Originally Posted by lurker

entire lot of fuel consumed in India isn't imported. 30% is produced in India itself.

We buy another 30% from Iran, and pay them as per long term contract.

I know but the under recoveries are stated and claimed by the OMCs on the world trade price basis. If imports are only 30% then of course a basis of some 40:60 Import: Export for calculations looks fairer to me!

[lurker]

Yes. But there is another scam brewing here too with the bulk diesel policy.

Now the bulk diesel consumers are basically Railways & State Transport Corporations. Now doesn't this put these folks at an unfair competitive handicap vis-a-vis the private operators. They pay Rs. 10 more per litre while the private transporter just goes to the fuel pump and pays the same so-called 'subsidised' price for diesel as anyone else.

Does the Govt of India want to totally destroy State Owned Transportation Companies. And put the people solely at the mercy of private sector operators. What a cunning group of operators. Even in their sleep they plot to destroy & compromise the role of the state which is benevolent to the common man and hand the country's transportation over to fly-by-night operators.

[bnzjon]

Another hike in Fuel prices coming this weekend.

News Courtesy : The Economic Times

NEW DELHI: State-run oil companies plan to raise petrol price by Rs 1 per litre and diesel by 50 paise a litre if they get the informal nod of oil minister Veerappa Moily, who has returned from week-long US trip on Wednesday.

Oil firms fear that political considerations could stall their plans of raising rates. Companies are free to charge market rates for petrol and raise diesel prices between 40 and 50 paise every month till it is aligned with global rates, but they want Moily's green signal to avoid being accused of disrupting the crucial budget session of the parliament, which will start next week, senior executives of Indian Oil, Bharat Petroleum and Hindustan Petroleum said.

Companies are suffering a revenue loss of more than Rs 1 a litre on petrol and more than Rs 10 on a litre of diesel because of northward movement of global crude oil prices, which was soared to a nine-month high close to $119 per barrel this month, executives said.

Indian Oil Chairman RS Butola said state oil marketing companies would "review" auto fuel rates this week. "We are following fortnightly (petrol and diesel pricing) cycle. That will be the time when we will again review prices," he told reporters after announcing company's financial results in the third quarter of current financial year. IOC's Q3 net profit jumped by 34 per cent at Rs 3,332 crore but it made a net loss of Rs 9,508 crore in nine months ended December 2012.

Butola said there was a decline in sale of bulk diesel, which is sold at market rates since Jan 17 after the government allowed companies to raise prices of subsidised diesel in a staggered manner and asked bulk buyers to pay market rates. Bulk diesel supply, which is sold directly by companies to consumers, constitutes 11 million tonnes of about 70 million tones diesel market.

Executives of IOC, BPCLBSE -2.19 % and HPCLBSE -3.00 % say that there is about 8-9 per cent decline in the sale of bulk diesel because buses of state transport corporations are refueling directly from pumps, where subsidized diesel is sold. "There is no law that would stop buses from taking fuel directly from retail outlets," Butola said.

The company has incurred a revenue loss of Rs 67,123 crore in nine months of the current financial year but the government has not fully compensated IOCBSE 0.79 % for selling diesel, kerosene and cooking gas below market rates, Butola said.

"If we had received full compensation, our profit would have been higher by Rs 3,700 crore," he said.

[sgiitk]

Totally expected. ATF had gone up (maybe twice) in the last month. The Diesel hike was on 17th January, so the timing is also correct. Brent had gone up to just under the $120 level expected, and is now a shade under $118. Let us hope it has peaked. I do not expect the Re:$ rate to improve given the events of the past two days.

[windsurfer]

The petrol and diesel prices are increased by Rs. 1.50 and 45 paise respectively.

More details at http://economictimes.indiatimes.com/...w/18517135.cms

[drmohitg]

So the price differential is back. As I maintained earlier the fuel prices are only gonna go up from here unless we are nearing a major election. With this increase the price difference between the 2 fuels is back to where it was. So are we gonna see the diesel variants return to there stronghold positions?

[avi550m]

Any idea on whether Shell Prices have shown an increase? As per the news, only the PSU's (IOC,HP,BP) will increase prices. Shell website still shows the old prices.

[hellmet]

Anyone know how much it costs now in Hyderabad?

[sgiitk]

Originally Posted by drmohitg

So the price differential is back. As I maintained earlier the fuel prices are only gonna go up from here unless we are nearing a major election. With this increase the price difference between the 2 fuels is back to where it was. So are we gonna see the diesel variants return to there stronghold positions?

Maybe for now, but a hike was expected as mentioned by me. If Brent also cools off (WTI is showing signs) then petrol may be again down (50p?!) while Diesel will again go up 50p on the 17th March. Why Diesel is up only 45p and not 50p beats me.