[ashtrix]

Originally Posted by Hayek

The mistake the government did was not raising taxes further when fuel prices were low. We need to get to a stage where fuel in India is priced at a level similar to that in the EU (EUR 1.4/ litre or ₹ 118 / litre right now in Finland for example) - we import all our oil and don’t have the money to give away to Arab petrostates.

I disagree with you about the lack of importance you attribute to oil to a nation's economy. Regarding government not raising taxes when fuel prices were low I would say that you are highly misinformed. I mentioned before in this thread that only the central government increased duties on diesel from Rs.3.56 per liter in 2014 to Rs. 17.33 and on petrol from Rs. 9.48 per liter to Rs. 21.48 when crude prices fell globally. States duties are over and above.

I am also fine with making petrol prices similar to what it is in Europe provided our per capita income is also made similar to what it is in Europe. Just to mention that a kg of rice sells for EUR 1.72 in Finland while in India it is EUR 0.59. In other words, a liter of petrol in Finland costs just 81% of the cost of a kilo of rice. Accordingly in India the petrol should cost EUR 0.48 per liter that is roughly about Rs.40/- per liter. Retail oil prices in India are indeed atrocious as compared to prices of other goods.

[condor]

Originally Posted by supremeBaleno

Oh really, now its conspiracy theory behind exchange rates. What next ? Aliens behind the fuel price hike ?

Not aliens, but earthlings. Just like the share market is often rigged. Not as simple as it seems on the surface.

[supremeBaleno]

We have had the Re touch mid-60s earlier too, but at that time the reason attributed to it by the current folks at the helm was corruption/inefficiency of the then Central Govt. Strangely no conspiracy then.

[PGA]

Originally Posted by Hayek

This is an oft debunked false notion that many people have. The fact is that transport costs are a small part of the price of virtually all products, and fuel costs are a small part of transport costs. So a 33% rise in fuel prices which we have already witnessed has not led to materially higher inflation (CPI inflation in August 2018 was just 4.18%). There is no “wider hit” to the economy when fuel prices rise.....

'In theory there is no difference between theory and practice. In practice there is' quoted a wise man. On paper what you say is , but:

A loaf of bread is already up from Rs 30 to Rs 35, public transport between two major cities of this area is up from Rs 200 to Rs 240 per seat, price of fertiliser (DAP) I use is up from Rs 2250 to Rs 2812 per quintal, from Rs 6000 that I was to earn extra per acre from enhanced MSP, Rs 2250 are going to go back to Govt as additional expenditure on fuel per acre........ my list is reasonably long.

Three years ago I started going to the vegetable market to sell my produce, the gyrations in the price of my produce were much more than what we see in the oil, I wondered why, I did all the possible research only to arrive at one definitive conclusion that price of produce doesn't have much to do with availability and stock, it was battle of perception, sometimes it was bulls and other times it was bears and often it was an arranged match.'Elementary my dear Watson' that's what Holmes would have said, so why am I angry. I wasn't gaining anything from these gyrations, not the retailer and certainly not the consumer, gainers were the people in the middle, the kind you saw in Manoj Kumar movies of 70's.

I am angry coz I get a feeling that Govt is acting like Shylock in a Shakespearean tragedy, it's making money on my misery and nor it's stopping others from doing it who are trying to make most of this opportunity. It is as simple as this.

[carboy]

Originally Posted by sgiitk

There are rumours that there is a gang trying to push the $ rate above Rs.100 by December.

It's not nice to refer to the Finance Ministry as a "gang".

[arundeepbv]

Apart from taxes , there are more reason's why the fuel prices are so high in our country. One of the things is how the petrol /diesel base price is calculated. After that we have all the taxes from the various governments and the authorities which increase the price of the fuel.

Please go through the below article to know more on how the base price of fuel is calculated


https://economictimes.indiatimes.com...w/65883173.cms

[dark.knight]

Originally Posted by arundeepbv

. Please go through the below article to know more on how the base price of fuel is calculated.

Thanks for the link, I've read it.. however just because there is an explanation for everything on earth, doesn't mean that the citizens will keep quiet after reading them. Let's just say that today's highly grotesque, unfortunate fuel pricing is due to various manipulations by international cartels, local taxation laws, various state governmental taxation twists etc.., are they written in stone? Shouldn't the so called government do something at a time when fuel prices are shooting through the roof literally? At least shouldn't the landed cost method of price determination be started, so that there aren't so many confusing factors in the equation, irrespective of ultimate result??

Fuel bunks are quite empty these days, it is to be expected since such prices have even scared the middle and upper-middle class people leave alone the segments below them.

Maybe we should stop trying to make sense of a government which is only trying to bleed us dry.. any explanation can be given, be it demonetisation, fuel pricing, GST multi-level taxation etc. Somehow people seem to read the reason/explanation as given by the mouthpieces of the rulers - the press and find contentment in that, I can't.

I'm not politicizing this issue, I'm apolitical to say the least, but over the course of 2-3 years I've observed that my spending for pretty much the same lifestyle as always.. has shot up by 25-30% easily, I don't think inflation should take all the blame. I hope this very government redeems itself at some point by showing some love to its citizens, instead of just mocking and spitting over the riches that constitute the white collar people of this nation. The equilibrium has to be brought back at some point.

[carboy]

Originally Posted by arundeepbv

Apart from taxes , there are more reason's why the fuel prices are so high in our country. One of the things is how the petrol /diesel base price is calculated. After that we have all the taxes from the various governments and the authorities which increase the price of the fuel.

Please go through the below article to know more on how the base price of fuel is calculated

So the article says, it's not just the increased excise duty - it's 4 other ways govt gained more money from high fuel prices

First is the increased custom duty the govt got because oil prices rose.

The 3 other ways from the article

The government gained in three other ways. First, higher profits for oil refiners meant higher tax on profits. Second, profits for state-owned refiners meant more dividend for government which is their main shareholder. Third, higher dividends distributed by public and private refiners meant more dividend distribution tax. All of these rose in the last three years.

[sandx]

This is looking like a hidden message to shift to using alternate fuel vehicles. Is there an electric vehicle lobby already active, who knows.

Once petrol breaches the 100 rupee mark, I do think there will be a slight if not significant change in the automobile sales figures.

In some of the villages i have been to, petrol is sold over the counter at a premium as there are no fuel stations. Must be selling at 100 already.

[ach1lles]

Originally Posted by PGA

Rs 2250 are going to go back to Govt as additional expenditure on fuel per acre........ my list is reasonably long.

Slightly OT, but would love to read your calculations for this, and the rest of the list too.

[PGA]

Originally Posted by ach1lles

Slightly OT, but would love to read your calculations for this, and the rest of the list too.

http://epaper.tribuneindia.com/18108...67885/topclips

Hope this is able to meet your curiosity. I grow three crops Paddy, Onions and Maize (expenditure very close to potatoes as given in above articles), you may like to run a sensitivity analysis to arrive at exact figures for various price points.

You may also like to read the following, it will help in better understanding of the problem

http://epaper.tribuneindia.com/18108...59399/topclips

[lurker]

https://m.timesofindia.com/business/...w/65886501.cms

NEW DELHI: India will settle payments for Iranian oil using rupee through local banks starting in November as US sanctions will make it difficult to settle trades through European banks, two industry sources said on Thursday.

actually US sanctions on Iran has turned out to be blessing in disguise for Indian govt. Iranian oil is now like domestic produced oil to be paid in rupees. This puts paid to another fallacy being propagated by the govt and it's mouthpieces that purchase of oil means outflow of dollars.

This coupled with inadvertant admission by power minister or some busybody that hybrid cars and electric cars were not an immidiate priority. It clears the way to tax the hell out of consumers without any moral repurcussions or dollar outflow in immidiate to mid term future by present and successive govts.

In future elections all prospecpetive competing political parties must give a written undertaking to public during electioneering/canvassing stage on how they plan to price petrol and force them to adopt a fixed/long term price policy for oil with fixed tax rates and sign on notary paper that they will stick to their word failing which they no longer eligible to hold office.

Originally Posted by PGA

http://epaper.tribuneindia.com/18108...67885/topclips

Hope this is able to meet your curiosity. I grow three crops Paddy, Onions and Maize (expenditure very close to potatoes as given in above articles), you may like to run a sensitivity analysis to arrive at exact figures for various price points.

You may also like to read the following, it will help in better understanding of the problem

http://epaper.tribuneindia.com/18108...59399/topclips

Many people do not realize that main ingredient of most of fertilizers and manufacturing of fertilizers & urea is naphtha and natural gas. So petroleum prices are very closely linked to agro inputs. Increase in price of petrol,diesel, LPG and natural gas automatically results in increase in price of fertilizers.

[Enigmatic]

Tanked up the Civic last night, petrol is almost INR 90/liter here in Mumbai.

I believe that something good definitely comes out of any and all situations. The "good" for me in this recent unapologetic and merciless fuel price hike behind the garb of fallacious reasons is that these incidents have forced me to go and exercise my vote for the first time next year with one intention only.

The intention is anyone's guess and for some reason I think that most of you will subscribe to the same thought process.

To those who are still defending this Government, more power to you because people have started looking through the veil of incompetence and as someone with a bit more experience than us lot rightly said "You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."



Best,
Enigmatic

[condor]

Originally Posted by Enigmatic

To those who are still defending this Government, more power to you because people have started looking through the veil of incompetence and as someone with a bit more experience than us lot rightly said "You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time."

This statement is fine only in a limited perspective of increased fuel prices. However, any one who is aware of even a sliver of the kind of manipulations going on with crude prices - and that too for non-commercial reasons - would not say this. Sometimes I feel like the Matrix is actually being played out out there (at the international leve), and we are all just pawns.

Even otherwise, it sure looks like the current rise in fuel prices seems to be the only thing you are seeing. Not about who / which govt, but there is lot many things that going right. But may be all that will not concern you.

[carboy]

Originally Posted by condor

However, any one who is aware of even a sliver of the kind of manipulations going on with crude prices - and that too for non-commercial reasons - would not say this. Sometimes I feel like the Matrix is actually being played out out there (at the international leve), and we are all just pawns.

The international price of crude is not really that high at present. It's less than 80$ at present. Which is far less than historic highs at 140$.

Try as one can, it's very difficult to pin the current high prices in India on anyone but our government.