[R2D2]

Originally Posted by carZest

Today's prices across various cities based on data from https://www.mypetrolprice.com Why are Mumbai/Pune so expensive?

Courtesy the broke State of Maharashtra whose Govt. in all its wisdom has also taken on the additional liability of writing off 40-41K crores (initially estimated at 30K crores) of farmer loans. How do they raise the money? You have your answer. We suffer the highest State taxes in the country.

[aaggoswami]

Originally Posted by deepv

Apparently some respite from govt. about fuel price rises:

ET - OMCs to absorb oil price hike

Doesn't seem so.
Dharmendra Pradhan rules out intervention on daily fuel price revision

Article:

NEW DELHI: Oil Minister Dharmendra Pradhan today ruled out government intervention to disrupt the daily revision in petrol and diesel prices despite Rs 7.3 per litre spike in rates since July, saying the reform will continue.

He however remained non-committal on cutting taxes to soften the blow of relentless rise in prices since July 3, the government need to finance huge infrastructure and social projects has to be balanced with consumer needs.
.. he said the drop in prices for over a fortnight after the daily price revision was introduced on June 16 has been ignored and only "temporary" phenomenon of rising trend is being highlighted.
India relies on imports to meet 80 per cent of its needs and so domestic fuel rates have been aligned to movement of equivalent product prices in the international market since April 2002.

...Pradhan said, adding that the daily revision immediately passes on the benefit of any reduction in international oil prices to consumers and avoids sharp spikes by spreading them in small doses.

"The government has no business to interfere in day to day operations of oil companies. If at all, efficiency is only areas government will interfere to improve operational efficiency of oil companies," he after meeting heads of state- run firms.

Asked if the government will cut excise duty to soften the blow, he said: "That is a call the finance ministry has to take but one thing is very clear - we have to balance the developmental needs with consumer aspirations."
In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre.

"It is high time GST Council should consider bringing the petroleum products in the ambit of GST," he said.

The daily price revision, he said, is in the interest of consumers.

The government has no business to interfere in day to day operations of oil companies.
Then why are there govt. owned OMC ?

Even if petrol comes under GST, the now infamous "Cess" can still be modified to cover for the "losses" due to GST.
Daily price revision is fair enough, but not the high taxes. Govt. needs to funds, etc. is old story now.
Govt. expenditure has to be controlled, very very controlled and incredibly honest.
There is no visible positive change w.r.t all tax recovered and/or collected, doubt if there will be any.

Originally Posted by lurker

And now look at the result, we have GST rates of 50% on cars and 70% of fuel. Unheard of anywhere in the world and that too in a country where only IT sector and Govt sector have any level of respectable salaries and stable income.

So coming to the main question, what where these people discussing for 5 years. After all their discussion we have obscene, never seen anywhere in world rates of GST @ 28% designed to devastate business activities and fuel taxed at 70%.

Both the points depict ground reality with which, it looks like, very few are aware of. If not paid attention to, it can turn out to be dangerous for economy in the long run IMO.

[deepv]

Originally Posted by aaggoswami

Doesn't seem so.
Dharmendra Pradhan rules out intervention on daily fuel price revision

...

Yes .. this was doing rounds in 9pm news, but I feel its more on daily pricing process that he seemed emphasizing.

However the concern is the petrol/diesel prices vis-a-vis the crude oil price.
As soon as crude price nears $50, the demand that the incremental excise duty that govt put on oil (while prices came down from ~$100) should now be reverted/eased.
But govt seems to be in no mood to do that, and to compensate they may push OMCs to tinker the formula of daily pricing.
More so after they lost good fraction of their earnings from RBI post DeMon.
We should see which way things go in a couple of days.

[drmohitg]

When this government blames technical reasons for the falling GDP, there is no surprise that they have conveniently forgotten the reasons dished out at the time of increasing the excise duties i.e. it will be revised if the international prices increase ( at the time they had fallen drastically).

For all they care, we can close this thread. They will never reduce the fuel prices because from almost all sectors they have killed their revenues by bringing out half baked, non-sensical policies. Fuel is the only commodity they can use to extract some money.

[The Rationalist]

The fuel prices have to go higher with brilliant ideas like bullet train that costs ₹ 1,10,000 crores is being built which reduces travel time from Mumbai to Ahmedabad from 7 hours to 4 hours! One could build at least 1 or 2 AIIMS in each state with such kind of money. Well this was the big hyped ache din I guess.

Leave AIIMS, we could build world class roads that will be more useful than the bullet train nonsense which will cost more than flights to travel! But who cares, it's tax payers money. No need for accountability, throw away as the rulers wish. In 10-15 years the regime changes and well we jokers live with it.

[SourabhSuresh]

Here is an article which throws light on the situation. The article highlights the exploitation of the middle class by keeping fuel prices out of GST. If fuel prices were included within GST we would have had a transparent mechanism for pricing. Now it's a free for all and both the union and the state governments are taking advantage.

Source - http://www.catchnews.com/amp/busines...-31-81134.html

[sgiitk]

I was going through the pricing, and it turns out that many states have decided to milk GST by jacking up one of the few things open to them, fuel pricing. Can someone kindly do a review of state taxation on fuel, pre and post GST. A lot of dirty truths will emerge.

[sandeepmohan]

Originally Posted by The Rationalist

The fuel prices have to go higher with brilliant ideas like bullet train that costs ₹ 1,10,000 crores is being built which reduces travel time from Mumbai to Ahmedabad from 7 hours to 4 hours!

Off topic: I believe this project is coming at almost no cost to us, considering the loan tenure. I do not know who will want to travel on this train considering an air ticket might just end up being the same or cheaper. Besides; I do not recall the public ever asking for a high speed rail network. Make the existing network safer.

[lurker]

₹32 belongs to central exise and ₹21 belongs to state. So you were saying ...

Originally Posted by sgiitk

I was going through the pricing, and it turns out that many states have decided to milk GST by jacking up one of the few things open to them, fuel pricing. Can someone kindly do a review of state taxation on fuel, pre and post GST. A lot of dirty truths will emerge.

[vin_b]

Originally Posted by lurker

₹32 belongs to central exise and ₹21 belongs to state. So you were saying ...

Not to sound political or anything. Just quoting the facts

The central excise duty on petrol is 21/- and state VAT is 14/- . Out of the 21, 42% goes back again to state , so the final tax share would be central 12/- and state 23/- . But there are states like MH where the VAT is atrociously high and hence the prices are 5/- per litre above national average.

[ksameer1234]

Originally Posted by carZest

Pune: 79.25 Rs/Ltr
Mumbai: 79.46 Rs/Ltr

Why are Mumbai/Pune so expensive?

Wait till you hear about Aurangabad petrol price which is 80.49 Rs/ltr!! This for a tier-2 city with infrastructure of a tier-3 city. I wonder what crime people in Maharashtra have committed to deserve this.

[dailydriver]

At least some of us will remember the story of the emperor Nero who was supposedly fiddling while Rome was burning. Without casting even an iota of suspicion on anyone, I would like to quote two statements of the honourable minister tasked with looking after the petroleum industry in India.

Fortnightly pricing was pinching consumers. We made it daily so you don't have to wait for 15 days to enjoy the benefits, if the international crude prices fall", he said.

"Because product (crude) prices drop internationally, that doesn't mean refining costs and transportation costs go down. State taxes sometimes go up too", Pradhan retorted.

Source

PS:All emphasis are mine.

[sgiitk]

Originally Posted by lurker

₹32 belongs to central exise and ₹21 belongs to state. So you were saying ...

Originally Posted by dailydriver

At least some of us will remember the story of the emperor Nero who was supposedly fiddling while Rome was burning. Without casting even an iota of suspicion on anyone, I would like to quote two statements of the honourable minister tasked with looking after the petroleum industry in India.

PS:All emphasis are mine.

Folks thanks. You missed out one part of my query - both Pre and Post GST Tax Levels. My own guess is that most states incl NDH, MH etc have jacked up the rates.

[ashis89]

Some inside info. Assam is the only state which is strictly against bringing fuel under GST ambit. Their concern is they would be losing their only source of revenue. Some other states are also supporting this stand as they get to hike the VAT as per their revenue generation needs.

[anb]

Originally Posted by vin_b

Not to sound political or anything. Just quoting the facts

The central excise duty on petrol is 21/- and state VAT is 14/- . Out of the 21, 42% goes back again to state , so the final tax share would be central 12/- and state 23/- . But there are states like MH where the VAT is atrociously high and hence the prices are 5/- per litre above national average.

The question is who is milking. It's definitively the central government. The central excise duty is increased over 300% while the hike in revenue from state sales tax is only 23%. Which is bigger, 300 or 23 ?