[Dry Ice]

Originally Posted by Dry Ice

Asked the question to our petroleum minister and PMO on twitter - how can petrol rise and diesel fall if both come from the same crude oil? Not that am hoping for a convincing answer or even a response as such. Let's see.

I am really surprised our fodder hungry media is mum on this topic except simply reporting the hikes.

No response.

Tweeted this again today to all the media houses. Let's see.

[NPV]

Originally Posted by Dry Ice

No response.

Tweeted this again today to all the media houses. Let's see.

I don't think anyone will ever answer that question since there is no answer to that question Plain simple silly reason and they tried pulling a fast one on the citizens

[pgsagar]

Just this morning I read that oil import bill is down by 40 per cent over last year. Can you imagine that? Since, generally yoy, there is always a rise of 5 to 10 per cent in consumption, we may safely assume that GOI saved at least 50 per cent on crude import outgo. And what part of it did they pass onto hapless consumers? Fuel prices are pretty much back up where they were last year around this time. If this isn't a public loot, then what is?

[DieselFan]

Originally Posted by pgsagar

Just this morning I read that oil import bill is down by 40 per cent over last year. Can you imagine that? Since, generally yoy, there is always a rise of 5 to 10 per cent in consumption, we may safely assume that GOI saved at least 50 per cent on crude import outgo. And what part of it did they pass onto hapless consumers? Fuel prices are pretty much back up where they were last year around this time. If this isn't a public loot, then what is?

My view is different in this case. higher fuel prices are good for the economy. More the fuel prices lesser would be the consumption and lesser the Forex outflow and lesser would be our yearly budgetary deficit. with higher fuel rates Automobile manufacturers will be forced to innovate and improve the fuel efficiency of the Two Wheelers/cars/buses/trucks manufactured. This is what we need for an overall improvement of Indian economy.

[pgsagar]

Originally Posted by DieselFan

My view is different in this case. higher fuel prices are good for the economy. More the fuel prices lesser would be the consumption and lesser the Forex outflow and lesser would be our yearly budgetary deficit. with higher fuel rates Automobile manufacturers will be forced to innovate and improve the fuel efficiency of the Two Wheelers/cars/buses/trucks manufactured. This is what we need for an overall improvement of Indian economy.

While, higher the prices lower the consumption theory works in most cases, I'm not sure it does in case of automotive fuels. At least not in India. No one leaves the engine running or takes a detour because fuel prices dipped today or left the vehicle home and walked/cycled or took a bus because fuel prices shot up. And budgetary deficit was never on account of crude import. Forex reserves, may be (owing to outgo in forex). But budgetary deficit? Naaaw. That is a different thing. Thanks to fleecing us fuel buying public, GOI made a killing on fuel sales in retail, customs duty on crude and excise duty on fuels contributing heavily to GOI coffers. I don't know what budget deficit you are talking about. In fact, thanks to high fuel prices (over cost prices), GOI is making up for losses elsewhere. And lastly, please let us shed this I am holy attitude and get down to reality. Let us be honest. Whom are we fooling? We are not here for votes or to score brownie points. We all want to pay less for goods and services and pay lesser taxes, too. At least I do.

[ashua]

Originally Posted by DieselFan

higher fuel prices are good for the economy. More the fuel prices lesser would be the consumption and lesser the Forex outflow and lesser would be our yearly budgetary deficit.

I Find the argument a bit flawed. If I buy fuel worth a Rs. 100 today, with the fuel price increase i will still spend Rs. 100 to buy fuel but will just end up getting less for my money. So not sure how the overall consumption and the Forex outflow reduces if the value I spent remained the same.

Originally Posted by DieselFan

With higher fuel rates Automobile manufacturers will be forced to innovate and improve the fuel efficiency of the Two Wheelers/cars/buses/trucks manufactured. This is what we need for an overall improvement of Indian economy.

I am sure the intent behind the increase by the Oil companies is not so noble. Innovation to improve fuel efficiency and find cleaner fuel alternatives are not governed by the day to day fluctuations in crude but the big picture of where fossil fuels are headed.

[ramzsys]

Originally Posted by pgsagar

And budgetary deficit was never on account of crude import.

On the contrary, it is. Our LPG cylinders and kerosene for the mango man's family is still subsidized heavily, which contributes to the budgetary deficit.

[pgsagar]

Originally Posted by ramzsys

On the contrary, it is. Our LPG cylinders and kerosene for the mango man's family is still subsidized heavily, which contributes to the budgetary deficit.

Still no. Hefty import customs duty on crude gets big moolah for GOI. And, I take all this talk about subsidies as hogwash by GOI. It's like marking up a 2000 rupee shirt to 5000 rupees, then selling it at 4000 and crying that the shirt is subsidised by 1000 rupees. All the talk about subsidy is a big load of crap. Unless someone puts all the nos. down on table from crude stage to refined and retail stage, we will not know. BTW, even assuming for a second that it is subsidised, the high petrol and diesel prices you and I pay are more than enough to tide over the subsidies.

[Chetan_Rao]

Originally Posted by ramzsys

......subsidized heavily, which contributes to the budgetary deficit.....

Subsidized heavily from arbitrarily marked up prices (due to absurd taxation), not subsidized from cost price. Big difference there.

The budgetary deficit is what it is because our government(s) keep announcing dime-a-dozen populist schemes without a hope in hell of actually funding them (the latest example is the ~ 1.2L Crore Food Security Bill mooted by the UPA a couple years ago), then goes about absurdly taxing the least resistant percentage of tax-payers in a doomed-before-it-started attempt to balance the books. Try touching the lobby-backed institutions to make up the deficit and watch them rioting in the streets tomorrow.

[sumzup]

Originally Posted by DieselFan

My view is different in this case. higher fuel prices are good for the economy. More the fuel prices lesser would be the consumption and lesser the Forex outflow and lesser would be our yearly budgetary deficit. with higher fuel rates Automobile manufacturers will be forced to innovate and improve the fuel efficiency of the Two Wheelers/cars/buses/trucks manufactured. This is what we need for an overall improvement of Indian economy.

Hey DieselFan your theory does not work with this situation and I agree with pgsagar

Originally Posted by pgsagar

While, higher the prices lower the consumption theory works in most cases, I'm not sure it does in case of automotive fuels. At least not in India. No one leaves the engine running or takes a detour because fuel prices dipped today or left the vehicle home and walked/cycled or took a bus because fuel prices shot up. And budgetary deficit was never on account of crude import. Forex reserves, may be (owing to outgo in forex). But budgetary deficit? Naaaw. That is a different thing. Thanks to fleecing us fuel buying public, GOI made a killing on fuel sales in retail, customs duty on crude and excise duty on fuels contributing heavily to GOI coffers. I don't know what budget deficit you are talking about. In fact, thanks to high fuel prices (over cost prices), GOI is making up for losses elsewhere. And lastly, please let us shed this I am holy attitude and get down to reality. Let us be honest. Whom are we fooling? We are not here for votes or to score brownie points. We all want to pay less for goods and services and pay lesser taxes, too. At least I do.

As I had previously quoted, the excess so earned is being used to fill some other deficit.

Originally Posted by ashua

I Find the argument a bit flawed. If I buy fuel worth a Rs. 100 today, with the fuel price increase i will still spend Rs. 100 to buy fuel but will just end up getting less for my money. So not sure how the overall consumption and the Forex outflow reduces if the value I spent remained the same.

The amount of fuel bought by you has reduced due to the overall value being reduced but you are right it does not change the consumption.


I am sure the intent behind the increase by the Oil companies is not so noble. Innovation to improve fuel efficiency and find cleaner fuel alternatives are not governed by the day to day fluctuations in crude but the big picture of where fossil fuels are headed.

You are right again, the intent here IMHO is that they are creating buffer and are going to use it in the coming months. There is a scheduled election in Bihar and they will drop prices substantially/consistently to improve their public image(I am definitely guessing).

Originally Posted by pgsagar

Still no. Hefty import customs duty on crude gets big moolah for GOI. And, I take all this talk about subsidies as hogwash by GOI. It's like marking up a 2000 rupee shirt to 5000 rupees, then selling it at 4000 and crying that the shirt is subsidized by 1000 rupees. All the talk about subsidy is a big load of crap. Unless someone puts all the nos. down on table from crude stage to refined and retail stage, we will not know. BTW, even assuming for a second that it is subsidized, the high petrol and diesel prices you and I pay are more than enough to tide over the subsidies.

There was a cost analysis done somewhere on this forum that I had seen and if my memory serves me right, the actual cost is just the half the MRP of fuel that we buy. So, what happens to the rest? Good question, the rest goes to the State Govt. by means of various taxes and levy. It is this that we need to question, because this is not being utilized properly and all the scams and excesses that we see is going out this kitty.

There is definitely "subsidy" maybe it is inflated maybe it does not reach the target audiences. One such illustration is as down under:

Over the past few years, Govt's have been running the subsidized food for BPL and are doling rice and other grains, and sugar to the "so-called needy" who in turn are selling it to those who have hired them and/or to others openly at half the market price. This is definitely subsidy gone wrong and gone wrong horribly. This has happened at one of my friend's house where a maid servant asked them if they were interested in buying rice and sugar at lesser than market price.

[sourav9385]

Rejoice peasants!

Our benefactors & overlords have decided to reduce petrol prices by 31 paise!

Not just that, an added bonus of reduction of 71 paise in diesel prices!

What a time to be alive!

[hellmet]

Originally Posted by sourav9385

Rejoice peasants!

Our benefactors & overlords have decided to reduce petrol prices by 31 paise!

Not just that, an added bonus of reduction of 71 paise in diesel prices!

What a time to be alive!

Wow, with this price drop I can travel an extra 195m on my bike! Whoopie.

This is just sad.

This is what they said on 15th June. What rubbish!

"Since last price change, there has been an increase in international prices of petrol while international prices of Diesel have shown a downward trend.

"Indian rupee-US dollar exchange rate has depreciated during this period. Combined impact of these factors warrant an upward revision in prices of petrol and a downward revision in prices of diesel, the impact of which is being passed on to the consumers with this price change," IOC said in a statement.

[RSR]

So the deliberate & artificial price gap between petrol & diesel continues with its rise upwards, eh?

As this has been going on even after the supposed "de-regulation" of all motor fuels, it can only mean that the sheer injustice and extortion against the poor, lower-middle & mid-middle classes of this country goes on unabated!

I sense a hidden hand behind all of this.

The hidden hand thinks it can get away with anything it does. It cannot!

I'm eagerly waiting for the day when karma (or payback) reveals its true nature to the hidden hand!

That day may arrive sooner than I expect.

[poloman]

My post may be termed political, but I have to say this. The Delhi govt has increased VAT to 30% and petrol prices are going to reach 72.xx a historical high I suppose. Now this coming from a govt run by a party which is considered the epitome of socialist politics. So let us be clear on this, no matter which ever party come to power fuel prices are going to be the cash cow and they are going to milk it. So let us all not waste time cribbing here.

[gsurya]

The only way to fix the constant tinkering of taxes on fuel is to bring it under GST. Unfortunately the present Govt has agreed to keep fuel out of GST instead of doing hard bargains & deals to get it done once for all.