[rajshenoy]

I may be wrong but i feel the main reason for the fall of our rupee is partialy due to high fuel import and since petrol is deregulated, its mainly diesel that is contributing to the weak rupee

So increasing diesel prices will actually make people spend less on fuel and soon rupee will be stronger, then diesel prices can be reduced accordingly

Ofcourse there are other factors like Syrian conflict etc that is out of our control

But 25+ rupee gap between petrol vs diesel sounds unfair

[Grr7]

Originally Posted by ac 427

wow, just have a look at the price hikes. I am wondering what went wrong. and where. Maybe the answer is 'the congress'.

Attachment 1132235

have a look at the hikes, alarming, scary, questionable, debatable. Anything but reasonable.

ac.

This graph is certainly missing on the CNG prices. The price for CNG has almost trebled, I remember it being some 12 rupees a kg when introduced a decade or so ago.

[stringbh]

Originally Posted by rajshenoy

Ofcourse there are other factors like Syrian conflict

That is right and the syrian conflict is only getting worse with another war in sight.

Originally Posted by rajshenoy

diesel...weak rupee.

Begs the question - How/why did they keep the diesel hike at the same .50 paise (i am not complaining), but, increase petrol?

[AMP]

Seriously every rise in petrol price gives me a solid tension. That day is not far when the petrolheads have to think twice before taking their cars out. There is no hope in future also as the current international scene between US and Syria will make the things worst.

[coolkurt]

Originally Posted by stringbh

That is right and the syrian conflict is only getting worse with another war in sight.



Begs the question - How/why did they keep the diesel hike at the same .50 paise (i am not complaining), but, increase petrol?

They can't increase diesel as it would mean a rise in the prices of all commodities. So they increase petrol. Indirectly, we petrolheads subsidize diesel.
Although there is some talk of the govt bracing for tough measures which include increasing the price of diesel by Rs 4-5 per liter

[vikramhere]

Originally Posted by coolkurt

Although there is some talk of the govt bracing for tough measures which include increasing the price of diesel by Rs 4-5 per liter

At present the under recovery of diesel stands at Rs. 10.22/L, even after the Rs 0.50/L increase today.

Only way for the govt to contain inflation is by reducing the burden on diesel as much as possible. But taxing the diesel subsidy on petrol might be a temporary solution for containing inflation but not a sustainable solution for long. Fuel price rise merely leads to a vicious circle of spiraling inflation.

A plausible solution for the govt would be to reduce the taxation on fuel to reduce the burden. For the common petrol-heads the best solution until then is to buy a good quality car cover.

[drmohitg]

With Oil becoming one of the most volatile commodities due to ever rising West vs Oil producing countries, the Govt has to rethink its strategy here. This knee jerk solution of increasing Oil prices ( earlier only Petrol and now even diesel gradually) has to be seriously reviewed now. Fuel is the backbone of the country's economy and there is a limit to which you can increase the prices. They have to start thinking of decreasing the taxes on Fuel. If that leads to a revenue deficit then that be it. Try and find alternate sources of revenue generation. Or try and control your expenses. Something will have to be done sooner or later on those lines.

[lapis_lazuli]

In NCR and other areas, it has another implication. All modern housing societies these days have power backup: limited or unlimited. Where I live, the price for power backup was 8/- per unit 6 years back. Is 17/- per unit, today. There are diesel gensets running to keep the homes lit up. The situation worsens in peak summer, when, frequency and duration of power cuts have no upper bounds, "uncountably unbounded" .

Whereas there is no proper technical analysis as to how much an unit should cost, given all overheads, there was a recent scam unearthed. Some builders were actually tripping the UPPCL supply, faking load-sheddings and running the DG sets. The sub-station technician and the builders DG operator (under the builders orders of course) worked hand in hand! It was definitely a value proposition, else why would they be doing it in the first place? So, there is another huge demand for diesel, which we "fuelheads" must consider as well. So, there is opportunity for more income as the diesel prices hike.

Is there a study on the fuel efficiency of the Gensets? Do the Kirloskar DG sets use the D4D engines which fail ARAI emission tests?

[Hayek]

Originally Posted by drmohitg

This knee jerk solution of increasing Oil prices ( earlier only Petrol and now even diesel gradually) has to be seriously reviewed now. Fuel is the backbone of the country's economy and there is a limit to which you can increase the prices. They have to start thinking of decreasing the taxes on Fuel. If that leads to a revenue deficit then that be it. Try and find alternate sources of revenue generation. Or try and control your expenses.

Have to disagree with almost all that you have said above. Fuels have strong negative externalities when they are used. Further, India does not have domestic fuel reserves and high fuel prices hurt our economy more than any other large economy in the world. Hence we need to have a tax system that encourages efficient use of fuel - viz ALL fuels must be taxed at the highest rate applicable to any goods sold in the country. The failure to raise kerosene prices for almost a decade, and the subsidy on diesel (diesel retails for Rs. 52 per litre in Delhi, vs. the international wholesale price of USD 0.8 per litre or Rs. 53 per litre) are insane policies, and among the key contributors to India entering a stagflationary spiral. There is a serious imperative to INCREASE taxes on diesel to bring it in line with those on petrol - so diesel should actually be priced at Rs. 75 per litre in Delhi. That would lead to people buying more efficient cars, and other users like those of DG sets opting at the margin for energy saving equipment or renewable energy. The saving to India would not just be the Rs. 22 per litre extra that the government collects - it would be from the decrease in fuel imports as we adjust consumption.

What should the government do with this extra revenue? Here I agree with you. They should certainly not waste it on schemes like NREGA and Food Security, but should use it to reduce deficits and to pay down the national debt. Following sensible policies will get us back on the trajectory of growth with low inflation - doing more of what we have been doing for the past 9 years will take the INR to Rs. 100 to the USD and beyond, and ensure that India once again becomes the basket case economy it was until the late 1990s.

[lapis_lazuli]

Originally Posted by Hayek

so diesel should actually be priced at Rs. 75 per litre in Delhi.

In fact...in EU, the prices of diesel and petrol are almost the same. What I find difficult to comprehend is, the class which actually "splurges" on fuel-bills: would, even a 200INR/liter, be a deterrent, to use lesser of whatever runs theirs? (Or maybe I am missing the point completely here, never mind!)

The mango flavoured cattle class, is always calculating how to be even more frugal, no?

[ramzsys]

Originally Posted by drmohitg

Or try and control your expenses.

I'm afraid, that is next to impossible with the current political disposition. Some experts(Amartya Sen included) argue that social spending(NREGS, Food bill) will augment to development in the long run. It secures the vote bank too(current ruling party thinks UPA 2 was a reality after UPA 1 because of NREGS).

The benefeciries(or, the dependents) of these social schemes are not bothered about fuel prices and these are the segments that vote en mass. Hence the bout of advertisements recently about Bharat Nirman and food security.

Those ruling class are very clear about what they are doing. It is we 'thinking class' who make a mess with(or, made to).

[999]

I just read this news on the malayalam daily. Veerappa Moily have given some suggestions to the government that includes reducing the working time of petrol pumps to 12 hours. But apparently this wont be applicable on national highways and main roads. Aim is to reduce consumption!! I dont think anyone specifically fill up their car after 8pm (well, I know the density will be a bit more at cooler temperature and it helps a wee bit, but still??), I dont think that will reduce consumption. A person driving long at night will fill before.
Link is in mallu language. I did not find a english one :( --> http://www.manoramaonline.com/cgi-bi...RIAL&BV_ID=@@@

Originally Posted by click

That's a broad generalisation to make. I don't think that's the answer or will even get any short term benefits.

Click, I meant the same. I should have been more clear.

[click]

Originally Posted by 999

I dont think anyone specifically fill up their car after 8pm (well, I know the density will be a bit more at cooler temperature and it helps a wee bit, but still??)

That's a broad generalisation to make. I don't think that's the answer or will even get any short term benefits.

I completely agree with what Hayek posted above. Also, we need to end subsidies on fuels and actually give subsidies to renewable fuel consumption and technology. Only then we can slowly but surely become more independent. Most matured economies are already doing that, can't understand why we haven't followed them at all.

[AbhishekB86]

From whatever I've heard in the news things aren't going to get better soon. End of the monsoon session we can expect another price hike and diesel prices will spiral upwards in the region of INR 3-5 . The PM is advising citizens to take austerity measures while we can debate how the VIP's need to practice them first the truth is the middle class is the most affected.

I've ruled out any out-station drives till petrol prices are controlled. Also personally for me, I've decided to keep my car at home whenever possible and not to make any unnecessary trips e.g. driving to a market which is a km away. To also add those who have their own businesses like my family are affected by the spiraling dollar.

My only hope is that with elections due next year the govt will take some short term measures to stabilize the rupee and not increase fuel prices. Any views on this fellow members?

[sumannandy]

An increase of Rs. 2.5 per litre would mean an additional expense of Rs. 200-400 per month. Just skip one dinner at a restaurant, and you will be alright, or use car less or drive the car more efficiently so that it consumes less fuel. In either case the difference is not that significant. Prices should fluctuate, but what Government should do is remove the high tax.

In my opinion it is absolute ridiculous to provide food by increasing tax for majority of the population. Rather you should provide work so that they earn money. This would also lead to nation building. How about building a superfast railway track between all metros, or connecting Leh by train?Or building superfast roads, complete N-S corridor? People who work there would get money and it would also lead to nation building.