[sgiitk]

Originally Posted by lohithrao

People should not forget, if the diesel prices go up it .....

We are all paying for the subsidy in higher inflation, and poorer 4exchange rate. There aint no free lunch!!

Originally Posted by AbhishekB86

I think diesel users are getting offended for no reason. We want a fair system in place

To make diesel owners sound righteous by saying they paid the premium is as if justifying an extended warranty purchased.

A agree totally. Even in Europe Diesels are outselling petrols even though Diesel id slightly moe3 expensive. The reason is the higher fuel efficiency of the Diesel. But then you have to be driving 50,000km or so annually to justify

[dreadknight5]

Originally Posted by AbhishekB86

I think diesel users are getting offended for no reason. We want a fair system in place

To make diesel owners sound righteous by saying they paid the premium is as if justifying an extended warranty purchased.

No one is saying keep the prices same. Inflation has to considered but when there's a price hike pending some harsh decisions need to be made.

Anyway there's a huge gap between the two fuels, so a one time hike may not hurt your premium much. Add your increased mileage to it. If things were as equal as some of the members point out, there would not have been a significant increase in diesel owners vs petrol owners.

Anyway, coming back to the topic is oily moily going to backtrack or is he going to increase diesel rates? Yet to figure out. Any hints from the Oily ministry yet?

Are you insinuating that increasing Diesel cost would reduce Petrol Cost ? Also, did you happen to check the link that has been posted In this FORUM which states that " 19% of Diesel is consumed by UV/Suv etc" and this number also includes the Transport Vehicles.

So basically if you increase the cost of Diesel : Food Cost will go up, Transportation cost will go up, Basic services cost will go up ( Maids, manual laborers etc), General cost of all items will increase.

So basically its going to be the case of Penny wise and Pound Foolish. I can tell you that cost of general products has gone up by about 20% since the past year. Let me give you an example " Milk cost about 17-18 / half liter last year and now it is 19-20" If you actually calculate the " imaginary amount" you are saving in " Perceived lower petrol cost" and the number you would be paying for increased Diesel cost, you will sing a different tune.

To be honest, I kind of would like this to happen so that I don't have to pay a big premium on my next Diesel Vehicle. I already got 50k discount on my new Hyundai I10 ( thanks to people running behind Diesel vehicles ). Now If I can get a similar discount on my next Vehicle (diesel) thanks to higher fuel cost, it will make my day.

[selfdrive]

Originally Posted by drmohitg

What you say is right. Any price increase hurts and the reason for price increase may be multiple, some under our control and some not. But what is appalling is to see this war or statements filled with anguish that Diesel car owners are having a field day.

I am not saying petrol subsidises diesel. I am not even saying that petrol prices should be reduced. What I don't get is why you say diesel prices should not be reduced because it will hurt diesel users. the same logic can also be used by petrol buyers too.

In the short term:
- taxes on all fuels should be reduced. but that will not happen because of the state of our economy. those running the country try to increase or keep taxes as par to ensure that the balance sheet is maintained. but they fail to cut expenses to do the same. just check all the unnecessary expenses and do away with them. politicians can afford to pay for their own security, travel and offices for example.
- subsidies on diesel should be taken away. that will not happen because of vote bank politics

In the long term:
- better infrastructure should be built up. that will not happen yet because of internal wrangling and lack of foresight.
- township planning including road development. this should have been done 20 years ago anticipating the growth in urban areas. but everyone and their nephews were busy acquiring land in the suburbs to make a killing later
- mass rapid transport means transport by rail, not by road. Just think of it, what if we had a high speed rail link instead of the GQ. Eurail instead of long drives.

But then what can we expect of a people who are more obsessed with a politician being jailed in a 20 year old scam than occupation of our territory by a 66 year old enemy?!

[ecosport]

Originally Posted by dreadknight5

So basically if you increase the cost of Diesel : Food Cost will go up, Transportation cost will go up, Basic services cost will go up ( Maids, manual laborers etc), General cost of all items will increase.

Do you have numbers to substantiate your claim? I had answered this in an earlier post. See below. No point in raising it again unless you have numbers to back it up.

Originally Posted by ecosport

This claim is due to a myth propagated by diesel subsidy appropriators to further their agenda. Somebody in this forum had earlier busted that theory by using hard facts (read numbers). In real, transportation costs account to only a minuscule of a commodity's price. And within the transportation costs, there are other factors like truck price, maintenance costs, salaries etc, and fuel costs is just one of them. In effect the difference due to fuel price increase of Rs 5, would hardly affect the price of the transported commodities by 1-2%.

Everybody cried hoarse when diesel price was hiked by Rs 5, like hell is going to break loose. Nothing happened.

[AbhishekB86]

Originally Posted by dreadknight5

Are you insinuating that increasing Diesel cost would reduce Petrol Cost ? Also, did you happen to check the link that has been posted In this FORUM which states that " 19% of Diesel is consumed by UV/Suv etc" and this number also includes the Transport Vehicles.

So basically if you increase the cost of Diesel : Food Cost will go up, Transportation cost will go up, Basic services cost will go up ( Maids, manual laborers etc), General cost of all items will increase.

So basically its going to be the case of Penny wise and Pound Foolish. I can tell you that cost of general products has gone up by about 20% since the past year. Let me give you an example " Milk cost about 17-18 / half liter last year and now it is 19-20" If you actually calculate the " imaginary amount" you are saving in " Perceived lower petrol cost" and the number you would be paying for increased Diesel cost, you will sing a different tune.

.

Thanks for already assuming my future singing tunes. Be rest assured my tune for a while has been the same. If you're aware of these things you would know that the hike of INR 1 rs in August has not helped under recovery. In fact it has been higher in September despite the increases.

Also for your benefit I was addressing a concern raised by diesel owners and my response was to a segment who claimed they paid a premium for diesel vehicles and how it's an equal space for both fuel operated vehicles.

I do realize that raising diesel prices will lead to a splurge in prices but that's already happening anyway, isn't it?

If you read carefully you would know that majority of petrol driven vehicles aren't owned by 'us' on this forum but the man who fills up for 50-100 bucks of fuel.

Also you should be aware that the budget deficit has been on the rise due to wasteful subsidies. The number is so enormous typing it out with numbers will make you wonder if you got the zero's right.

What the govt should do in my honest opinion is take a hike if it's willing to look beyond the policy paralysis it suffers from. Maybe take off the subsidies in urban areas.

For the record, I am not saving much. No Sir. In fact I'm spending more, all of us are. Even the wise diesel owners are paying more than yesterday for almost everything.

[drmohitg]

Originally Posted by selfdrive

I am not saying petrol subsidises diesel. I am not even saying that petrol prices should be reduced. What I don't get is why you say diesel prices should not be reduced because it will hurt diesel users. the same logic can also be used by petrol buyers too.

No brother. That was said in a totally different context and you will have to read the post again along with the quoted post.
I never said that petrol prices shouldn't be reduced. Infact its painful to see the way they deal with petrol pricing and that is the reason that many of us have willingly shelled out more money and changed our petrol cars with diesel ones even though my running doesn't justify the mathematics of owning the diesel car but the psychological stress one has to go with owning a petrol car was just getting too much to handle. For instance now my altis runs almost 800 kms on a tankful of diesel costing me around 2200 rs ( approximately less than 3rs/km running cost).
What I have always said is that fuel is an integral part of everyone's life. So the govt needs to understand that fact and start finding alternative sources of revenue and keep a range beyond which petrol or diesel prices should not be raised. If they cannot do that then they ought to check the wastage of money in there various schemes etc. Whatever they do, they should keep fuel prices within a certain reach of the common man. Ensuring better public transport etc will also go a long way in reducing the total use of fuel.

But all that is mere philosophical talk. From what I gather, there would be no solution in the near future. They would keep increasing petrol prices followed by smaller increases in diesel prices and the disparity between the 2 fuels will stay atleast in the near future.

[supremeBaleno]

Originally Posted by drmohitg

...many of us have willingly shelled out more money and changed our petrol cars with diesel ones even though my running doesn't justify the mathematics of owning the diesel car but the psychological stress one has to go with owning a petrol car was just getting too much to handle. For instance now my altis runs almost 800 kms on a tankful of diesel costing me around 2200 rs ( approximately less than 3rs/km running cost). they should keep fuel prices within a certain reach of the common man.

You yourself admit that in your case the math does not add up in favour of going diesel, but you still went diesel to overcome some "psychological stress" endured when you pay Rs20 more per litre for petrol compared to diesel. I am surprised you did not feel any stress when you shelled out a few lakhs more (that too in advance at purchase) for a puny 1.4litre diesel engine in the Altis. Anyway your money, your choice, but the point here is that the common-man does not drive an Altis-D or even a Swift-D and I doubt even 0.1% of the folks on this forum come under the much-abused common-man category. Like someone mentioned, the actual common-man is the one who fuels up petrol for 50-100 bucks and they see the qty reduce every time a petrol-hike comes.

As someone clarified here with data, diesel price-hikes do not really cause inflation as transportation is just one of the factors in the cost of a product. And since the common-man does not drive a diesel-car, I think we really need to reduce the gap between petrol and diesel - the 50p hike every month is a step in the right direction, but the monthly hike quantum should be atleast Re1 or more. Once the prices are levelled (or diesel is higher), the car-makers will reduce the huge premium they currently charge for diesel cars.

[dreadknight5]

Originally Posted by ecosport

Do you have numbers to substantiate your claim? I had answered this in an earlier post. See below. No point in raising it again unless you have numbers to back it up.

There you go
http://articles.timesofindia.indiati...el-consumption

Since , you might not be interested in reading the entire column


"Diesel, in contrast, follows a more predictable consumption pattern. The study says 66% of the fuel is used for transport, 19% for agriculture, more than 2% for powering mobile towers and the remaining for running back-up generators and construction equipment.
Diesel consumption is estimated at 69 million tonnes. Light and heavy commercial vehicles - mini vans and trucks - and buses burn 38% of total diesel sold in the country.
Cars and sports utility vehicles account for about 19%, much in line with the rise in sale of diesel cars due to the fuel's price differential with petrol due to continuing government subsidy.
Much of this subsidy could be benefitting commercial enterprises such as taxi operators. The survey shows use of diesel cars and SUVs for commercial purpose is the highest in south at 20% and lowest in the eastern region at 16%."




So like I said

19% of Diesel Consumed by Agriculture
38% of Diesel for Trains, Trucks and buses ( unfortunately, there is no further breakup here )
13% by manufacturing industry for running their generators
2% by Mobile Towers

The Statistics above itself indicates a direct correlation between Diesel prices and day to day commodities . The price of Diesel a year ago was in the 46 something. It is 56 something and price of all commodities has increased in similar proportions.

It is a viscous circle. The farmer will need more money to pay for his diesel utilization. He buys fertilizers and seeds at increased cost since the manufacturer needs to offset his loss by increased transportation and manufacturing cost ( diesel generators etc when applicable).

The farmer sells food at higher cost. People need to earn more to buy food / transportation cost, so basically unskilled labor cost goes up right away. This again spirals into the manufacturing business since they predominately use unskilled labor. So this is a never ending cycle and we are the sufferer's.

Again I have explained this at a very high level. As for people talking about the INR 50 -100 customers in the bunk. Please consider those that cannot even AFFORD to spend INR 50-100 in the bunk.

[drmohitg]

Originally Posted by supremeBaleno

Like someone mentioned, the actual common-man is the one who fuels up petrol for 50-100 bucks and they see the qty reduce every time a petrol-hike comes.

This is what happens when you read only one of the posts and decide to quote. The whole discussion from my part began when I said that no "CAR owner" is poor that they cannot afford a 2-3 rs price hike in the Petrol prices. That is all. It might hurt you psychologically, just like in my case as you aptly put, but that is about it. The real troubled lot are the bikers getting 100 Rs worth of fuel filled kind of group and I don't deny that.

PS: Yes I knew I might not cover the difference in my Altis. Still decided to go ahead with it. Having that diesel heart gives me the freedom to not think twice before taking any journey, however small or big the distance is. Couldn't have done the same with a petrol car.

[vinjosep]

Ok, have a rudimentary question here.

Does the nationalised Petroleum companies say that they are making losses? AFAIK they show "under-recovery", which is different from "losses".

Under-recovery is when income from sales minus cost of refining petroleum is a negative number. Again my impression was that the "cost of refining" they are referring to is that of Singapore (or some such country, NOT the refining cost in India).

Would be great if someone could clarify if I have the right info

[ecosport]

Originally Posted by dreadknight5

There you go
http://articles.timesofindia.indiati...el-consumption

You are not focusing. I do not dispute that prices of everything would increase. BUT, by what percentage? A Rs 5 increase (10%) of diesel does not increase transportation cost by even 2%. That is because fuel is not the only ingredient when you calculate transportation costs. You can do the math yourselves for agriculture, mobile phone towers et al. If they hike the price to remove all subsidies, under-recoveries etc (Rs 70), the resulting one-time increase in price of all commodities, services etc (say a 10% increase) would not be as huge as it is made out to be by the subsidy appropriators.

Again, anything that is cheap gets wasted. People filling their tanks with subsidized fuel do not know/care the worth of it.

Originally Posted by drmohitg

This is what happens when you read only one of the posts and decide to quote. The whole discussion from my part began when I said that no "CAR owner" is poor that they cannot afford a 2-3 rs price hike in the Petrol prices. That is all. It might hurt you psychologically, just like in my case as you aptly put, but that is about it. The real troubled lot are the bikers getting 100 Rs worth of fuel filled kind of group and I don't deny that.

You can't draw a line after the bikers, I feel. Everybody gets hurt at various degrees. But the ones who are least likely to get hurt enjoys subsided diesel. Almost all of those entry level cars run on petrol. More than half of the mid-segment cars run on petrol. So essentially, the poor and middle class has to buy fuel at Rs 75 while the upper class and rich gets subsidized diesel.

[sourav9385]

Originally Posted by supremeBaleno

You yourself admit that in your case the math does not add up in favour of going diesel, but you still went diesel to overcome some "psychological stress" endured when you pay Rs20 more per litre for petrol compared to diesel. I am surprised you did not feel any stress when you shelled out a few lakhs more (that too in advance at purchase) for a puny 1.4litre diesel engine in the Altis. Anyway your money, your choice, but the point here is that the common-man does not drive an Altis-D or even a Swift-D and I doubt even 0.1% of the folks on this forum come under the much-abused common-man category. Like someone mentioned, the actual common-man is the one who fuels up petrol for 50-100 bucks and they see the qty reduce every time a petrol-hike comes.

As someone clarified here with data, diesel price-hikes do not really cause inflation as transportation is just one of the factors in the cost of a product. And since the common-man does not drive a diesel-car, I think we really need to reduce the gap between petrol and diesel - the 50p hike every month is a step in the right direction, but the monthly hike quantum should be atleast Re1 or more. Once the prices are levelled (or diesel is higher), the car-makers will reduce the huge premium they currently charge for diesel cars.

Brilliantly put!

I just don't understand the whole "common man uses diesel so lets keep it priced low" malarkey going around these days. The cheapest diesel car costs at-least 500,000 INR, as far as I know.
Hardly the price bracket some common man is going to be looking for, while considering buying a new car.

As has been demonstrated multiple times on this thread, I too feel that increasing the price of diesel has no major impact on the cost of most stuff.
Removing the subsidy might just help this ailing economy and country. Alas, if only pigs could fly.

Enough has been said on the price difference between petrol & diesel, so no use commenting on this anymore .

[AbhishekB86]

Originally Posted by dreadknight5

There you go
http://articles.timesofindia.indiati...el-consumption




Cars and sports utility vehicles account for about 19%, much in line with the rise in sale of diesel cars due to the fuel's price differential with petrol due to continuing government subsidy.
Much of this subsidy could be benefitting commercial enterprises such as taxi operators. The survey shows use of diesel cars and SUVs for commercial purpose is the highest in south at 20% and lowest in the eastern region at 16%."




So like I said

19% of Diesel Consumed by Agriculture
38% of Diesel for Trains, Trucks and buses ( unfortunately, there is no further breakup here )
13% by manufacturing industry for running their generators
2% by Mobile Towers




Again I have explained this at a very high level. As for people talking about the INR 50 -100 customers in the bunk. Please consider those that cannot even AFFORD to spend INR 50-100 in the bunk.

Edit : I realized I was sounding like Oily Moily so due apologies, and without any intervention, I withdraw my previous comment. Again if you look at the deficit it is one of the reasons why we're in trouble. The ministry has been wanting to raise prices forever and our growth is stunting due to this subsidy. Vote bank politics and a weak govt has led to this decision being pending.

Also there should be a policy in place and would require overturning of system to keep private vehicles out of the subsidy bit. Would diesel owners be okay with that? Under-recovery will improve with your 19% out of the deficit contributing zone , 5 lakh+ vehicles excluded from the list. Again this will not be fair for vehicle owners who've paid a premium but every family in India gets an unfair deal at some point and frankly if there's another way out it should come quick. Noone is willing to invest in India anymore, growth rates are on a downward spiral and some decisions need to be made.

[sgiitk]

@AbhishekB86; Dual pricing is a failure which was always suspected. So the only option is a full price with refunds to the deserving (not necessarily all agriculturists, since most netas claim that).

[selfdrive]

Originally Posted by sgiitk

@AbhishekB86; Dual pricing is a failure which was always suspected. So the only option is a full price with refunds to the deserving (not necessarily all agriculturists, since most netas claim that).

Sir, I keep repeating this. I will have another go.
Instead of subsidies on fuel, why not sell at market rate and then give tax exemption on income tax for example. This will ensure that people file for tax also correctly and on time. Only automated fuel receipts should be accepted, no manually written chits.

the only thing remaining would be to finalise a solution for those not eligible to pay tax. Maybe they can be given tax credit to be adjusted in future years when they will earn more