[sunnyworld]

Saw a funny thing today while driving. A family of four sitting very uncomfortably on a bike were standing side by side an SUV with a single passenger inside.

Imagine the family on the bike is subsiding the running cost of the SUV. Only in India.

[drmohitg]

Originally Posted by sunnyworld

Saw a funny thing today while driving. A family of four sitting very uncomfortably on a bike were standing side by side an SUV with a single passenger inside.

Imagine the family on the bike is subsiding the running cost of the SUV. Only in India.

Whats the point of that remark? You think that they are only subsiding the SUV? They are also getting way cheaper LPG, vegetables and what not because of that subsidy.

The SUV guy pays much more tax too on his income then the family on the bike due to different taxation rates ( safely assuming that he earns much more then the family on the bike). So the SUV guy must also be feeling cheated at some point of time.

Such comparisons do nothing for the discussion at hand. And anyways how many diesel SUVs you think run on our roads? The biggest diesel guzzler is the B and C segment which see sales in thousands compared to the SUVs.

[msdivy]

Originally Posted by sunnyworld

the family on the bike is subsiding the running cost of the SUV

Its a misconception that diesel is subsidized. The IOC & other refineries get crude oil (petrol & diesel) at close to Rs 24~26 per litre. After adding the refining cost, the price comes close to Rs 42~44 per litre for both petrol & diesel. Note that diesel cost is slightly more since it requires further refining than petrol.

Diesel is sold after adding the central, state taxes & the price at the bunk is between Rs 45~48.
Petrol is sold after adding a lot more levies & taxes & the price at the bunk is between Rs 71~75.

When Govt says it is subsidizing diesel, its actually means that it is losing money from the levy & tax which are *not* applied on diesel like in petrol.

[sunnyworld]

Originally Posted by drmohitg

Whats the point of that remark? You think that they are only subsiding the SUV? They are also getting way cheaper LPG, vegetables and what not because of that subsidy.

The SUV guy pays much more tax too on his income then the family on the bike due to different taxation rates ( safely assuming that he earns much more then the family on the bike). So the SUV guy must also be feeling cheated at some point of time.

Such comparisons do nothing for the discussion at hand. And anyways how many diesel SUVs you think run on our roads? The biggest diesel guzzler is the B and C segment which see sales in thousands compared to the SUVs.

It was not a remark. Just an observation. I am sorry if I offended you in any way. That was not my intention.
AFAIK, we all get advantage of the LPG subsidy so am not sure what is the point here.
My point was that the subsidy which the Govt claims is in place for the benefit of the poor is to a certain extent also being funded by the poor.

Originally Posted by msdivy

When Govt says it is subsidizing diesel, its actually means that it is losing money from the levy & tax which are *not* applied on diesel like in petrol.

I am not sure but isn't the price of diesel controlled or regulated by the Govt. I mean, if we accept the premise that rupee devaluation was one main reason for the petrol hike, it should also impact the diesel prices. The fact that diesel prices are as is (for now) is clear indicator of Govt regulating the prices.

[alpha1]

Originally Posted by msdivy

Its a misconception that diesel is subsidized. The IOC & other refineries get crude oil (petrol & diesel) at close to Rs 24~26 per litre. After adding the refining cost, the price comes close to Rs 42~44 per litre for both petrol & diesel. Note that diesel cost is slightly more since it requires further refining than petrol.

Diesel is sold after adding the central, state taxes & the price at the bunk is between Rs 45~48.
Petrol is sold after adding a lot more levies & taxes & the price at the bunk is between Rs 71~75.

When Govt says it is subsidizing diesel, its actually means that it is losing money from the levy & tax which are *not* applied on diesel like in petrol.

Which is the same thing to the cosumers.

If you see what you wrote: Diesel is sold after adding the central, state taxes & the price at the bunk is between Rs 45~48

Why are extra loading duties and taxes levied on Petrol?

[goandude]

Saw this nice comparo between petrol, diesel and auto gas from Jun 2002 till date. Notice how the gap between P and D widens after Aug 2010.

[drmohitg]

Hopes of a reversal after the Mamta banerjee bomb? I am sure the govt will be forced to roll back this last hike as they are in no position currently to lose her alliance at the centre.

[msdivy]

Originally Posted by sunnyworld

I mean, if we accept the premise that rupee devaluation was one main reason for the petrol hike, it should also impact the diesel prices. The fact that diesel prices are as is (for now) is clear indicator of Govt regulating the prices.

Govt has huge storage of crude oil. They have long term contracts for crude oil. I don't think short term price fluctuations of crude oil price affects them. The price hike of petrol is more of a long term price strategy decision.

Originally Posted by alpha1

Which is the same thing to the cosumers.

No isn't. Subsidizing diesel would mean money from petrol being used to buy diesel (at high price) but sell at lesser price, ie, if MRP of diesel is Rs 50 & if Govt is selling diesel at Rs 47, then its is subsidizing diesel. But here diesel is being sold at market rate ie 47 itself is the MRP.

Why are extra loading duties and taxes levied on Petrol?

As revenue for Govt.

[abhishekgbiswas]

Originally Posted by drmohitg

Hopes of a reversal after the Mamta banerjee bomb? I am sure the govt will be forced to roll back this last hike as they are in no position currently to lose her alliance at the centre.

I would definitely hope that something good can come out of our CM's stance. With the current price over Rs 73/litre, an increase of around 22% YTY, we are definitely trending upwards at an uncomfortable rate.

[Ali]

No words to be said, Shame on the Govt! Here in HYD its 77 rupees a litre, which is unacceptable. Why does the petrol price not go down, when there is a drop in prices per barrell.

Someone needs to step up against this, it will pinch everyone, but what about the poor people who dont use a bike or car, but have to pay more for essential commodities.

[extreme_torque]

Our government has simply failed us. It seems congress wants to take as much out as it can until it is in power. I wouldn't be surprised if the italians go back to their country after they finish their terms in the office.

[NPV]

Petrol price in Bangalore today was Rs.76.80 after the latest price hike - Seems like Bangaloreans will be the first to pay Rs.100 per litre very soon

This unfair trend is definitely going to skew the passenger car market even more towards Diesel cars. Going further, maybe it will completely wipe out the market for Petrol cars ! I hope it's not just me thinking such a day may come in the near future.

[Fordmanchau]

Here atleast someone has made a start against this irrational petrol price hikes.
Read this.
Petrol price hike: Kerala high court slams decision - The Times of India

Was watching a discussion on NDTV Hind for Petrol Price . Came to know that Govt. is sitting on Cairn's application to increase their production of Oil by around 1000bpd for a year from their Mangla Oil fields in Rajasthan.
Imagine what these extra oil can do to prices if it comes into market. Petrol pricing is seriously a scam.

[karty_83]

Originally Posted by NPV

Going further, maybe it will completely wipe out the market for Petrol cars ! I hope it's not just me thinking such a day may come in the near future.

At this rate such a day is definitely on. Everyone has their threshold for these insane prices after which they will be compelled to move on. I guess even the used car market will be hit with no one wanting to go for petrol cars.

Noob question. Is it not possible for the Government to regulate petrol prices again ?

[sunnyworld]

Govt. hinting at a partial roll back

Some rollback possible - Congress

Perhaps some relief in the near future.