[drmohitg]

So how was the government surviving all these years when the fuel prices were much lower than the current prices. There has been an alarming increase in fuel prices only in last 2 years. So in these two years has the government expenditure also increased alarmingly in order for them to raise taxes on fuel?

And what about all the extra tax they collected owing to the recent prike hikes? This is the same old story.

[mpksuhas]

While we were busy discussing probability of a price decrease on 15th Nov, price of both Petrol & Diesel increased by Rs. 1.50 / liter.

News link.

[Mohan Mathew A]

The increase in excise duty is completely unjustified in my opinion. This is a government which has come on the promise of reducing taxes and the burden on common man and now they increase the tax. Disappointed!

[saket77]

Will the price rise get neutralized while deciding for the price for the next fortnight, i.e..15 Nov? If not decrease, I hope there is also no increase in the fuel price.

However, that hike is completely unjustified and the common man has every right to feel that he has been cheated by not getting the benefits of falling crude prices in a de-regulated pricing mechanism.

[gsurya]

With crude being at historic lows, a really bold & path-breaking move will be to now convince states to also allow fuel to be brought under GST.

Then move kerosene & LPG also to market pricing & give BPL consumers direct subsidy via Aadhaar.

This will ensure permanent decontrol - but its a tough ask, will this Govt with a comfortable majority step up to the plate?

[lapis_lazuli]

The minister says the nett price will not increase: this is after the next reduction or before?

And when prices go up again internationally, will he reduce the increased excise duty to keep the prices same?

[sgiitk]

It appears that the OMCs are absorbing the excise increase, to the net result on the pump should be zilch. Remember in the days of $120 oil the duty was cut on both Diesel and Petrol, so now reimposing is not totally unexpected. So one decrease is neutralised!

As for GST the high tax states like MH and TN oppose inclusion of Petroleum and Alcohol totally.

[gsurya]

My take:

• Policies are made & implemented by Govts
• Govts are run by political parties
• If you want to debate policies, you will have to debate the Govt
• So any discussion on pros & cons of a policy or its implementation cannot be without sides
• If there are people on one side, there will be some on the other side in a democracy

Those who feel comfortable with only one-sided debates should not be debating in the first place.

[joslicx]

Originally Posted by lapis_lazuli

And when prices go up again internationally, will he reduce the increased excise duty to keep the prices same?

This is the idea R Jagannathan of Firstpost had also suggest few days back.

http://firstbiz.firstpost.com/econom...ad-106691.html

Now that diesel is deregulated, if lets say by next year crude moves to 120 levels again then politicians would have some cushion via the excise cuts. Also Higher prices keep usage in check.

Anyway, the extra revenues from increased duty should ideally go into renewables

[SchumiFan]

Originally Posted by joslicx

This is the idea R Jagannathan of Firstpost had also suggest few days back.

http://firstbiz.firstpost.com/econom...ad-106691.html

A highly enlightening piece. I would say it is a good move by the Govt. The extra money can be used as a reserve for subsidy or invested in schemes for the welfare of the people.

We might need to have stable fuel prices so that any extra amount recovered can actually be used for improving the lifestyle of the public.

Considering what was the cost of fuel a couple of months before and the reductions that happened recently, I don't think this hike should affect us massively.

Make hay while the sunshines being done positively by the Govt.

[poloman]

Originally Posted by gsurya

My take:

• Policies are made & implemented by Govts
• Govts are run by political parties
• If you want to debate policies, you will have to debate the Govt
• So any discussion on pros & cons of a policy or its implementation cannot be without sides
• If there are people on one side, there will be some on the other side in a democracy

Those who feel comfortable with only one-sided debates should not be debating in the first place.

Absolutely, we will have to discuss about news like this also in tandem
http://economictimes.indiatimes.com/...w/45145007.cms
I am not in favor of heavily decreasing the price of fuel in a country like India which depend on imports heavily. What we are not discussing here is why the benefit of already low fuel prices is not passed on to consumers, be it in the form of a price cut in transport sector or lowering the prices in hotels who religiously increase their prices when there is an increase in fuel prices.

[lurker]

So what is the policy strategy vis a vis alternate energy.

[ckranjan]

Increasing excise duty is a good move, however the excise duty that is levied on both the fuels are not same. There is a Rs 6 / L of special excise duty on petrol. Why petrol consumers should bear this extra tax? On top of that most of the state govt.s have more taxes on petrol than diesel.

There should be a parity in terms of taxes on both the fuels. My 2 cents.

[gsurya]

Originally Posted by poloman

Absolutely, we will have to discuss about news like this also in tandem
http://economictimes.indiatimes.com/...w/45145007.cms


I am not in favor of heavily decreasing the price of fuel in a country like India which depend on imports heavily. What we are not discussing here is why the benefit of already low fuel prices is not passed on to consumers, be it in the form of a price cut in transport sector or lowering the prices in hotels who religiously increase their prices when there is an increase in fuel prices.

Not sure how one month's WPI numbers is relevant to a discussion on increase in excise duty?

In fact LPG/CNG prices are due to now go UP due to Govts increase of royalty, so we can expect auto / bus rates to go up, not down, in next few months.

Hotel rates are mainly linked to location, availability, occupancy & taxation - nothing to do with fuel.

[joslicx]

Originally Posted by SchumiFan

A highly enlightening piece. I would say it is a good move by the Govt. The extra money can be used as a reserve for subsidy or invested in schemes for the welfare of the people.

We might need to have stable fuel prices so that any extra amount recovered can actually be used for improving the lifestyle of the public.

Considering what was the cost of fuel a couple of months before and the reductions that happened recently, I don't think this hike should affect us massively.

Make hay while the sunshines being done positively by the Govt.

Here Forbes also endorses it and recommends same to US

http://www.forbes.com/sites/timworst...medium=twitter

Interestingly global oil subsidies are of the order of $550 billion!!!