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Old 4th October 2018, 21:43   #6526
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Default Re: The Official Fuel Prices Thread

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Originally Posted by dailydriver View Post
I am flabbergasted by this measure. What will happen to the nation? Worst things were predicted to befall if the excise duties on fuels are cut. Will we able to escape the trap now?

The Hindu

TOI

While news channels are predicting a net revenue loss of more than ₹20,000 crores, I have started worrying about the means through which I - the common taxpayer - will have to make good that loss.
The current account deficit (CAD) is becoming unmanageable, that may be quite bad for the economy. But when leaders become the Santa Claus, one cannot help ! It is like endorsing the old administered pricing mechanism (APM) on petrol and diesel again, with the subsidy component.

This is an electionphobia gimmick. There appears to be panick that has set in , to prompt them to take such a drastic step. It appears to be a pre-planned, but poor-visioned master-stroke to influence the voters. The NDA ruled states were also very much in the loop, with this planned move that was announced only this evening. And diesel has not been touched by the states.

During the Karnataka elections around end of April to May 2018, they had freezed all increases on petrol and diesel prices for the entire nation for more than a fortnight. The election results are for all to see. Hence, this gimmick may not work on a large scale, as the masses are always wary of such steps taken and the media reach and penetration is now reaching the grass root levels.

It is anybody's guess as to how long these price cuts will sustain and keep the prices below Rs 90=00 nationwide ? In Nanded and Latur (Maharashtra) prices were around Rs 93=00 to 94=00 for a litre of petrol last.

The new US sanctions on Iran come into effect from 01/11/2018 and that's when our imports from Iran may be throttled and badly affected. Payment to Iran is in US $ now and continuance will mean US sanctions will apply largely to India and to the respective payment agencies like banks and financial institutions transferring money (US dollars) to Iran. They are talking of rupee payments to Iran through UCO Bank and another bank , but its not yet clear as to how that will work.

So 01/11/2018 is not far and may bring another oil shock for India. And in the present global scenario with trade tensions between the US and Iran, oil prices are northward bound. We dont see any Trump- Kim like summit with Iranian leaders, as both sides are stubborn. There will be a lot of hoarding and speculation by international traders in the oil market, that may further affect the oil prices.

Hence, its not clear as to where we are destined with our burgeoning oil imports !

Last edited by SDP : 5th October 2018 at 07:03. Reason: As requested
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Old 4th October 2018, 23:07   #6527
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Default Re: The Official Fuel Prices Thread

Quote:
Originally Posted by dailydriver View Post
I am flabbergasted by this measure. What will happen to the nation? Worst things were predicted to befall if the excise duties on fuels are cut. Will we able to escape the trap now?

While news channels are predicting a net revenue loss of more than ₹20,000 crores, I have started worrying about the means through which I - the common taxpayer - will have to make good that loss.
This whole notion of a revenue loss is a big bunch of lies. Fuel taxes are a percentage, which means collections go up when the base prices go up. Hence , a small cut in the tax rate won't cause any loss.

Let me show you a simple example.
Imagine the tax to be 40% on a base price of 50 rupees.

50 + ((40/100)×50)=70 rupees. The revenue is 20 rupees.

If the base price is increased to say 60 rupees,
60+ ((40/100)×60)= 84.

The government earns extra 4 rupees without any increase in taxes . Even a cut of 6% won't cause any loss.

60+ ((34/100)×60)=80.4 . The revenue is still 20.4 rupees.


Here , we are just talking about a cut of 2.5 rupees.
They are still getting higher than projected revenues.

Quote:
Originally Posted by anjan_c2007 View Post
The current account deficit (CAD) is becoming unmanageable, that may be quite bad for the economy. But when leaders become the Santa Claus, one cannot help ! It is like endorsing the old administered pricing mechanism (APM) on petrol and diesel again, with the subsidy component.
Where is the 2 lakh crore rupees mopped up by increasing taxes when oil prices were low ? Spend that money now.

Sir, collecting 40 rupees in taxes per litre and giving back 10 rupees is not a subsidy.

We, in India are redefining the meaning of the word subsidy.
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Old 4th October 2018, 23:11   #6528
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Default Re: The Official Fuel Prices Thread

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Originally Posted by Ragavsr View Post
This whole notion of a revenue loss is a big bunch of lies. Fuel taxes are a percentage, which means collections go up when the base prices go up. Hence , a small cut in the tax rate won't cause any loss.... .
What you are saying is correct for state VAT, but excise duty is a fixed value per litre and not a percentage. Because of this states have made good gains with every increase of the basic price of petroleum products.
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Old 4th October 2018, 23:44   #6529
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Default Re: The Official Fuel Prices Thread

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Originally Posted by fiat_tarun View Post
What you are saying is correct for state VAT, but excise duty is a fixed value per litre and not a percentage. Because of this states have made good gains with every increase of the basic price of petroleum products.
correct. The state taxes are a percentage while the central taxes are a fixed value per litre. Also 42% of whatever the center collects goes to the states. So the center isn't really making too much money. Most of it is state revenue and that is why none of the states want petrol to be under the GST umbrella.
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Old 5th October 2018, 04:39   #6530
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Default Re: The Official Fuel Prices Thread

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Originally Posted by HKap View Post
So the center isn't really making too much money.
The center makes money from petroleum sales across India while states makes only from what they sell locally. The ex-chequer has made around 16.87 lakh crore from petroleum sales in the last 4 years by keeping the prices artificially high. And here we have our finance minister crying about loss of 10,000 crore of tax revenue from this decrease. Leeches.

https://www.firstpost.com/business/p...r-4481795.html
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Old 5th October 2018, 04:44   #6531
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Over the past couple of weeks this thread has had some interesting arguments. I am keen to see the impact to those arguments after this massive tax cut.

Are the camps goings to change their positions? 😬
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Old 5th October 2018, 05:10   #6532
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Default Re: The Official Fuel Prices Thread

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Originally Posted by extreme_torque View Post
The center makes money from petroleum sales across India while states makes only from what they sell locally. The ex-chequer has made around 16.87 lakh crore from petroleum sales in the last 4 years by keeping the prices artificially high. And here we have our finance minister crying about loss of 10,000 crore of tax revenue from this decrease. Leeches.

https://www.firstpost.com/business/p...r-4481795.html
Well, the center also has to give back some portion to *all* the states, a process called devolution.

Also, the center's expenses are far, far higher. For example: Rly track doubling, DFC construction, NHAI highways, etc are all entirely funded by the center, and they're pan-India and much greater in scope/length than what's within any one state. Even the metro worked in various cities are 50-50 funded by center and state.
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Old 5th October 2018, 05:12   #6533
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Default Re: The Official Fuel Prices Thread

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Originally Posted by rav11stars View Post
This might be totally off-topic:
As much as we love revving and riding our rides, I'd say it's time we, the entire human race get back to our senses and start acting in the best interest of the generations to come.

I know we all love to drive, but driving at the cost of endangering the future? Doesn't look like a sensible choice. I know that in most of our cases we don't have much of a choice too.

...

P.S : All I wanted to say is, it'd be so nice if we think before we act in everything we do or else all we can save for the future will be some digits in some virtual space.
Very valid points; I had shared similar thoughts on another thread a month back.

Quote:
Originally Posted by ninjatalli View Post
11 guys spread across 8 cars that more or less all went through the same route

Sometimes I think this forum of ours should focus (or lead the way) more on eco-friendly driving. I know there is no limit how far can we push the case (question can be raised then why do such drives), but I guess there's always a starting point somewhere.

Sorry if this is OT; thought it was relevant and hence the post.
Btw this would be definitely OT; so maybe any of the mods could move these posts to a separate thread
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Old 5th October 2018, 12:53   #6534
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Default Re: The Official Fuel Prices Thread

To lighten the mood here a bit

Just got this in my Times of India newsletter:
The Official Fuel Prices Thread-unnamed.jpg
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Old 5th October 2018, 14:03   #6535
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Default Re: The Official Fuel Prices Thread

I am disgusted by the media articles that I see today after the central government cut Rs 2.5 yesterday. The blatantly mis-represent facts. Firstly, they say it is a massive tax cut. Nope. The tax was very high in the first place. The cut was very minimal. Secondly they say that the government will absorb the hit the revenue will take. Nope, no hit. We have seen crude prices at $120 before without paying 90 rupees per liter of petrol. So, the government is actually earning more than the earlier governments. Hence no hit. Thirdly, they are throwing around all the 'fiscal' arguments (tight fiscal rope, fiscal deficit etc.). Why is it that we, the common citizens, are always at the receiving end of all the fiscal arguments? If we didn't get the benefit of lower crude prices, why should we be made to bear the burden of higher crude prices? Makes me think the media guys must getting some 'fiscal' benefit to spout all these nonsense they are spouting.

Last edited by ashlil : 5th October 2018 at 14:04. Reason: typo
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Old 5th October 2018, 14:34   #6536
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Originally Posted by ashlil View Post
Makes me think the media guys must getting some 'fiscal' benefit to spout all these nonsense they are spouting.
but still the below link should give you the answer for the ‘fiscal’ benefit of media.
https://m.hindustantimes.com/india-n...ym9BzAxwI.html
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Old 5th October 2018, 17:40   #6537
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Default Re: The Official Fuel Prices Thread

Received a really funny forward-

Ab toh ek bhi din petrol diesel ke daam na bade, toh bechaini ho jaati hai. Yeh lagta hai kahi desh mein vikas ruk toh nahi gaya (Translation: Now if the prices of petrol/diesel do not increase even for a day, I get very restless. I feel as if the development in the country has stalled.)

Last edited by Vitalstatistiks : 5th October 2018 at 17:41.
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Old 5th October 2018, 17:54   #6538
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Default Re: The Official Fuel Prices Thread

Moderator Note: A reminder of our forum rules - please do NOT discuss politics / politicians / political parties on Team-BHP. Thanks!

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Old 5th October 2018, 19:08   #6539
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Default Re: The Official Fuel Prices Thread

From my understanding of news articles, the excise cut is only INR 1.50/-. The OMCs have cut an additional INR 1.00/-. So a lot of the analytical articles are not true.
Plus the given reduction of INR 2.50/- will decompensated in 20 days with an average rise of INR 0.10-0.15 per day.
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Old 5th October 2018, 20:04   #6540
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Default Re: The Official Fuel Prices Thread

The tragedy of the commons, well illustrated.

All this time I was feeling better even when taking in the bitter pill of rising fuel costs in the hope that this will induce a cultural change like increased car pooling, viability of mass transport systems and what not. For those who think this isn't relevant, kindly see the air quality index map of our country. When the thinking is 'i better be in the safe space of my air conditioned car than breathe the toxic fumes in a bus/train', there's more real challenge to our sustenance than fuel costs.

We take 4 steps forward and then take 2 backward. Congrats to all those who fought for this. You won & please don't rest on your laurels. Keep making and passing those memes.
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