[saurabhkum]

Originally Posted by poloman

In short lot of cross subsidy is happening here even though Govt claim sector is being deregulated. So unless you deregulate the price of entire crude products, this kind of dilly dallying will happen.

In India a stable fuel price mechanism is always better since every one has habit of increasing prices if petrol/diesel prices go up. But the reverse never happens.

This is exactly what my point is. My whole point was that the price is not totally deregulated. Please don't take my post as something against you or your views. It's just the gimmick you say that prices are not controlled and see dependent on international market.

[i10]

Major reduction in fuel prices!

Petrol price was today cut by 91 paise per litre amid sliding global oil prices, while that of diesel was reduced by 84 paise.

Source: http://profit.ndtv.com/news/economy/...4-paise-692513

[ramanak]

Originally Posted by i10

Major reduction in fuel prices!


Source: http://profit.ndtv.com/news/economy/...4-paise-692513

Why is the reduction so low? Less than a rupee cut! Pathetic.

[lurker]

Originally Posted by i10

Major reduction in fuel prices!


Source: http://profit.ndtv.com/news/economy/...4-paise-692513

major major reduction indeed.

Govt is a partner in profits, but not in loses.

loses have to be born by customers only. A famous carporate phrase comes to mind.

*the increase in prices shall be passed on to the customers*

and what about any decrease in prices then .. ??

STONE DEAD SILENCE.

[GrammarNazi]

IMO the media is purposely over-reporting the small drop so people loose interest in these fluctuations.

India is a price sensitive market, keeping track of fuel prices is very important to us. The reason is that we KNOW how these fluctuations would effect commodity prices and try to make sense of prices.

When people start belittling the fluctuations, they wouldn't keep in track of what is priced at which level and why, since we would've grown un-sensitised to the pricing.

[harry10]

Shocking. Pathetic.
I was expecting at least 2-3 Rs cut.
What's the reason for such low cut?

[lancer_rit]

Hmmm, may be because it is fixed? Fixed cost is just that, 'fixed' and do not have an impact on price variations.

Nope. Samurai is right about fixed costs(or more precisely non-crude oil costs) vs crude oil cost.
Take an example, if crude oil is 80% of total costs, and crude oil reduces by 30%, total costs only reduce by 30*0.8% = 24%. So we need to factor this into the price reduction debate on petrol /diesel. Do note that cost ratio was an example, other folks may know the precise factor.

[ghodlur]

Originally Posted by i10

Major reduction in fuel prices!

Deregulation my foot. Thats the biggest joke in this country. Today the crude has fallen to Sep 2009 level i.e less than 68$ and out so called politicos are reducing the fuel prices in paises. Ha.

[i10]

This is from the IOC website - the price breakup. For petrol, the selling price to landing price ratio is almost 100%

Price Paid by the Oil Marketing Companies to Refineries Rs/Ltr 34.56

Price Charged to Dealers (excluding Excise Duty and VAT) Rs/Ltr 39.71

Add : Specific Excise Duty (Rs.10.70/ Ltr+ 3% Education cess) Rs/Ltr 11.02

Add : Dealer Commission Rs/Ltr 2.04

Add : VAT (including VAT on Dealer Commission) applicable for Delhi @20% Rs/Ltr 10.55

Retail Selling Price at Delhi- (Rounded) Rs/Ltr 63.33

Source: https://iocl.com/Products/PriceBuild...ldup_of_MS.pdf

This is the breakup from 16th November (retrieved from Google cache). Notice the 50% increase in Oil company's margins per litre. This is possible due to the ~ 6% decrease in landing price

Price of Gasoline (Petrol) BS III equivalent $/bbl 93.23
Average Exchange rate Rs/$ 61.46
Price Paid by the Oil Marketing Companies to Refineries Rs/Ltr 36.70
Price Charged to Dealers (excluding Excise Duty and VAT) Rs/Ltr 40.46
Add : Specific Excise Duty @ Rs.11.02/Ltr (Rs.10.70/ Ltr+ 3% Education cess) Rs/Ltr 11.02
Add : Dealer Commission Rs/Ltr 2.05
Add : VAT (including VAT on Dealer Commission) applicable for Delhi @20% Rs/Ltr 10.71
Retail Selling Price at Delhi- (Rounded) Rs/Ltr 64.24

[MaxTorque]

Can we actually blame the government for the current petrol pricing? Its purely deregulated right? Or am I missing something?

[NPV]

Originally Posted by MaxTorque

Can we actually blame the government for the current petrol pricing? Its purely deregulated right? Or am I missing something?

Deregulated yes but we still pay multiple layers of taxes (and tax on tax!). See the discussions on earlier pages to understand

[MaxTorque]

Originally Posted by NPV

Deregulated yes but we still pay multiple layers of taxes (and tax on tax!). See the discussions on earlier pages to understand

I am not trying to justify the petrol price. But my point was except rolling back the recently hiked excise duty, government can not do much. It's oil marketing companies are taking the advantage. If they reduce the price, all other components will come down right? I don't think both will happen at same time.

[civic-sense]

- First the govt deregulated pricing. Now, technically govt cannot dictate the pricing.

- Then they increased the taxes, and asked the OMCs to eat up the differential.

- Then crude prices dropped. Now since OMCs could drop the price by a huge margin, but they drop the price a bit and keep the rest with them.

Actually, that was a smart one from the govt, isn't it?

- Somebody who is not following the crude prices (almost nobody) would still be happy because he is paying less.

- OMCs are happy because their margins just went up.

- Govt is happy because their tax revenue just went up.

They killed three birds with a stone.

BUT, deregulation turned out to be a big farce.

[lurker]

Can the name of this thread please be changed to

*the fuel pricing farce thread*

a request to mods. Maybe some ridicule may find a way through that thick skin.

and simultaneously I also wonder as to why no one is making any noise about this. Especially the perenially complaining political parties like CPI(M), Lefties etc.

Tomorrow if world fuel prices come down to 5$ per barrel, our politicians and so-called 'fuel dacoits oops companies' would still be merrily charging 50Rs from the Indian public.

It is really a collaboration between bureaucracy and corporates that is in responsible for perpetuation of this fraud.

[sandeep108]

Deregulation in the absence of true competition is almost always farcical. This is what is happening. I wonder why the Competition Commission of India is not taking the OMCs to task for colluding to keep prices high. But I do believe that since oil is a precious natural resource which will not last forever, government must play its role in raising taxes on it when oil prices are low. These taxes must be used to improve efficiency in usage of crude and/or alternative energy sources.