Read a article in Economic times where the FM says that crude oil cost per barrel has shot up to $67 from $28. If this trend continues, the loss will be between 30000 cr to 40000 cr this fiscal. The only option to cope up with the situation is to increase the price of the petroleum products.
Oops; where it will end.
Is there any other alternative with you other than increase in prices
2. Electric cars
The govt of india(and other govts) do not push these hard because the refineries gain a lot from oil price increase. If india goes the electric way oil company lobby stands to loose. Shell of USA is buying new jet aircraft, and their profits are soaring. If the world moved to alternate energy sources, these companies would lose money. Since they are rich and powerful, their voice is heard. Only Japan is doing something worthwhile
Are you aware, that in japan the Reva is tax free and the govt gives a subsidy of 2600$. So if indian govt were to abolish taxes on reva and give subsidy it will sell for 75K only. But the govt is not going to reduce excise and taxes on electric vehicles because of the oil lobby. this story repeats in the USA also where oil lobby is very powerful.
For us indians its time to throw out the monkey sitting on FMs post and the donkey leading the nation should also go out alongwith. All these two have done is tax the middle class and appease the super rich and the super poor
Other options are
1. Govt can cut duty and taxes on petroleum products, because as the rate goes up the %age tax on this amount also goes up. So the govt is making more money than they budgeted for from petroleum products. Obviously govt is happy to see more tax revenue coming in and is not willing to cut down on duties.
2. Since all crude is not imported, as the crude prices goes up companies extracting crude earn more profits (they sell crude at a higher price). Govt can redistribute this profit so that other oil companies do not make losses. But again this is a complex process and govt does not want to do it.
3. Increase the retail cost - this is the easiest option that govt sees, but it will have disasterous long term impact on economy. But here who cares about the long term.
Congress ka saath aam admi ke saath - haathi ke dant dikhane ke aur & khane ke aur
diesel increasing by 7.6 Rs/ litre, great... and i was thinking of giving off my santro and going for a diesel car.... i think i better buy a Reva... atleast current is cheaper compared to petrol/diesel.
Nice one, Rtech. But, I guess though most of us think like that, we would never get around to doing it. Sort of like when they raise the cigarette prices, smokers think of quitting. Driving/riding is also sort of addictive.
Way back in '85, when I started driving, a litre of petrol was less than 9 bucks and today is like 47.5 - an increase of 5 times in 20 years.
Last edited by supremeBaleno : 19th April 2006 at 16:05.