[lurker]

Originally Posted by babu.sundaram

Banning cars or anything would get into people' rights. Setting higher price is not . I should be able to drive when I want to, provide I pay the price.

A good that is priced higher always would be used efficiently.I heard in Saudi, people don't switch off engines as it gets hot and fuel is cheap.. this when they go shopping! DOnt know how to true it is.. but I do see people sleeping with AC on even at current prices).

Lower fuel prices -> Increased consumption -> Pollution & Forex drain.

So you agree deregulation is scam.

your explanation reeks of some kind of stockholm syndrome where one justifies the perpetrator and criticises the victim.

[StarScream]

Originally Posted by babu.sundaram

Banning cars or anything would get into people' rights. Setting higher price is not . I should be able to drive when I want to, provide I pay the price.

A good that is priced higher always would be used efficiently.I heard in Saudi, people don't switch off engines as it gets hot and fuel is cheap.. this when they go shopping! DOnt know how to true it is.. but I do see people sleeping with AC on even at current prices).

Lower fuel prices -> Increased consumption -> Pollution & Forex drain.

He has a point. In fact China this month kept prices unchanged, increasing margins for refiners, and explicitly said this was to limit consumption and pollution.

We've seen what the differential pricing of diesel has done to demand in India.

Originally Posted by lurker

So you agree deregulation is scam.

your explanation reeks of some kind of stockholm syndrome where one justifies the perpetrator and criticises the victim.

While I don't believe there is any altruistic rationale in India's case, keeping prices relatively high has the unintended benefits of curbing consumption and pollution. Crude at an 11-year low anyway won't translate exactly to pump prices in India because the rupee isn't where it used to be 11 years ago.

While deregulation hasn't quite worked out the way it should, I have a different take on it. You can't have distortions like the extra (double) taxation on petrol compared with diesel and then expect there to be free and complete pricing freedom. If they fix the whole system - equal taxation, one countrywide tax rate - then true deregulation can be expected.

[lurker]

Originally Posted by StarScream

Crude at an 11-year low anyway won't translate exactly to pump prices in India because the rupee isn't where it used to be 11 years ago.

Another scam. Both rupee-dollar prices and petrol prices are fixed by govt.
Now somebody will jump to say, no no rupee is market decided onlee.
RBI decides how much dollar to release into market and it can manipulate currency market for short term easily.
And that short term is enough to last a couple of days when prices of fuel are supposed to change.

[StarScream]

Originally Posted by lurker

Another scam. Both rupee-dollar prices and petrol prices are fixed by govt.
Now somebody will jump to say, no no rupee is market decided onlee.
RBI decides how much dollar to release into market and it can manipulate currency market for short term easily.
And that short term is enough to last a couple of days when prices of fuel are supposed to change.

Over the short term and faced by a small threat, yes the rupee-dollar rate can be managed. But not over the long term and confronted by large macro factors such as the US raising rates and the dollar strengthening because of a return of capital flows at the expense of emerging markets like India.

To think that the RBI is hand in glove with the oil cabal is a bit rich.

[supremeBaleno]

To say that we have deregulated fuel pricing and then still continue to regulate the prices is a big joke on the public. When crude prices rise, increase petrol/diesel/gas prices. But when they drop, don't pass on the benefits to the consumer. How convenient. But if there is an election in some state, magically there is price cut.

And for those saying that higher fuel prices will deter people from buying cars or using them lots, maybe for some people. Rest of the folks would continue with their normal usage, for lack of more workable transport options for them.

[sgiitk]

Originally Posted by lurker

Another scam. Both rupee-dollar prices and petrol prices are fixed by govt.
Now somebody will jump to say, no no rupee is market decided onlee.
RBI decides how much dollar to release into market and it can manipulate currency market for short term easily.

RBI has much bigger things to manage than possibly a rupee or two in petrol.

Originally Posted by StarScream

Over the short term and faced by a small threat, yes the rupee-dollar rate can be managed. But not over the long term and confronted by large macro factors such as the US raising rates and the dollar strengthening because of a return of capital flows at the expense of emerging markets like India.

To think that the RBI is hand in glove with the oil cabal is a bit rich.

I agree with you fully.

Every central bank tries to manage short term fluctuations through various mechanisms. India does not think the INR is ready for a full float yet,

[Lalvaz]

Originally Posted by babu.sundaram

- Higher oil prices would probably drive more people to public transport. For e.g. Volvos in Blr are costlier than my car for one person, with three or four, car becomes cheaper!

If the Volvo is costlier than your car for one person, then it would obviously be costlier for a full car load. What point are you trying to make?

The fact is that the government and OMC's kept issuing statements earlier pressing for deregulation of fuel in order to move to a free and fair market economy. Yet, when global crude prices are dropping, we do not see the benefits. This is unfair at the least.

Also, the public transport in India needs to be dramatically more comfortable, reliable and cost effective if the government wants to wean people away from private cars and suv's. Currently, that's far from reality. Until and unless that happens, it's not feasible to expect people to stop using their private cars.

[civic-sense]

I am all for higher fuel prices, but its funny how people suddenly realize that higher fuel prices are better now, when crude is so cheap and not when it was $140.

And constantly increasing taxes when crude prices fall is a scam, a mockery of deregulation, and a slap on the face of the common people.

[WindRide]

Govt increasing tax on fuel is just a face saver attempt to meet the fiscal deficit target of 3.9% of the GDP for 2015-16. It might not meet this target since GDP growth has been slower than projected.

Quote from an online article -
"Since June 2014, the specific excise duty on diesel has been hiked from Rs 3.56 to Rs 11.83 per litre, and from Rs 9.48 to Rs 19.36 per litre for petrol. The annual revenue gain to it from these increases would add up to Rs 95,000 crore or so - Rs 68,000 crore from diesel, and Rs 27,000 crore from petrol. The excise duty has been hiked seven times since November 2014. Getting back to the fiscal deficit-it is more than likely that the government will meet the fiscal deficit target of 3.9% of the GDP. This will be achieved through higher excise duty collections. Don't be surprised if the excise duty on petrol and diesel is increased further, if the price of oil falls any further (let's say it goes below $30 per barrel)."

[romeomidhun]

When the crude oil prices were around $120, the Petrol were priced at Rs 75/- in Chennai. Now, when the crude is priced at 1/3rd of that at around $40, Petrol is priced around Rs 60/-! And nobody even from the opposition is there to react against it. This is absolute daylight robbery. And people who blindly say "kee jai" for these kind of rulers, will once realise what a "change" they have brought.

[khoj]

$20 per barrel in sight

[carboy]

I think we should close off this thread till the time oil crosses 80$ or so. Irrespective of whether oil is 30$ a barrel or 70$ a barrel, the cost at the pump is going to be the same for us. The govt will tax the hell out of it and we are really not going to benefit from the dip in oil prices.

We will see price deregulation only after oil crosses 80$ or so - then prices at pump will start increasing even more. Let's close this thread for now.

[sgiitk]

Originally Posted by carboy

I think we should close off this thread till the time oil crosses 80$ or so. Irrespective of whether oil is 30$ a barrel or 70$ a barrel, the cost at the pump is going to be the same for us. The govt will tax the hell out of it and we are really not going to benefit from the dip in oil prices.

No sir, the price will change only the VAT component will not, having hit the floor rate. As it stands some analysts expect Oil to hit $20 before increasing to the $40 level next year, and stabilizing there. Also, (very surprising) after the US Rate Increase the INR has started strengthening. Furthermore Brent is marginally lower than WTI/Nymex.

[johannskaria]

Is $20 even a viable cost of production for OPEC countries?
I personally doubt it.

We will also see the government holding the prices (by taxing) at these levels so as to not add to the import bills.

All in all don't expect government to pass on much cuts except before the next wave of state elections.

[carboy]

Originally Posted by sgiitk

No sir, the price will change only the VAT component will not, having hit the floor rate. As it stands some analysts expect Oil to hit $20 before increasing to the $40 level next year, and stabilizing there. Also, (very surprising) after the US Rate Increase the INR has started strengthening. Furthermore Brent is marginally lower than WTI/Nymex.

Price change will be irrelevant till the barrel prices hits 70-80$. Till the price is decreasing, the government will just keep increasing tax to compensate for the decrease in price. Even if oil comes to 5$ per barrel, we will be paying Rs. 70 at the pump.