[ACM]

Originally Posted by lancer_rit

Without an iota of doubt, we are finally on the right path.Once the diesel subsidy is gone, hopefully, the taxes on fuel esp. Petrol will be rationalized!

Yep it is good to see diesel subsidy going. And that is a correct move. But let us not expect that taxes on Petrol will be rationalized. Nope that is not likely to happen, they would need that to fund various activities. Even now Petrol price by itself is NOT subsidising diesel in anyway though it does go into the same overall kitty from which Govt. manages various subs and expenses. Besides Kerosene plus the first 9 gas cylinders will continue to be subsidised for now.

[sgiitk]

@ramanak; You were right, but this is a one off. I was not aware that they skipped the April hike. So this is a one off unlessthey again play up later this month. Of course if they need moolah for the Food Seciruty Act /Ordinance then things may again move.

Originally Posted by lancer_rit

Without an iota of doubt, we are finally on the right path.Once the diesel subsidy is gone, hopefully, the taxes on fuel esp. Petrol will be rationalized!

Hold your horses, see my note above.

[lancer_rit]

Originally Posted by sgiitk

@ramanak; You were right, but this is a one off. I was not aware that they skipped the April hike. So this is a one off unlessthey again play up later this month. Of course if they need moolah for the Food Seciruty Act /Ordinance then things may again move.


Hold your horses, see my note above.

I didn't say things will get rationalized fast, just that they are on the right track. I am aware that there was no 50p hike in April, just glad that they didn't forget to adjust in May. So 50p for Apr and 50p for May.

@ACM, central levies are higher on petrol than diesel. That said, a lot of the skew is because of state and local body taxes, I agree. When the prices of diesel and petrol are closer, one may hope for fair local taxes on both fuels (at a reduced rate possibly) as diesel price will not be a holy cow for Govt.

[apachelongbow]

Originally Posted by drmohitg

What is the impact of these hikes on inflation? I am amused. Till january when the first hike was announced all the opposition parties and various transport unions were predicting "end of the world" scenario for the economy if diesel prices were touched. Now 4 hikes later I don't see anyone even issuing a statement on the same. It would be really interesting to see how far the govt goes with this policy.

Have you seen the latest industry growth figure for 2013? Its a shocking 1% growth. That is the real reason for halt in inflation, the prices are not rising but growth has stopped too. Although the govt and the economists hate to admit it, this country is is deep depression and the industry parameters are in doldrums as they were in 1991-1992/pre reforms.

[bharatbs]

Originally Posted by misquitas

As mentioned earlier, Goa is now the only state in the country where petrol (Rs 52.1) is now cheaper than diesel (Rs 52.7).

I wonder how many (in Goa) would still want to consider a diesel car, especially since diesel variants are around Rs 1 lakh over and above the petrol variant of the same model.

In UK and especially Ireland, people who have long daily commutes use Diesel vehicles because of the better fuel efficiencies of modern Diesel engines. This is despite the fact that Diesel retails for slightly more than Petrol in UK and Ireland.

In Goa since it is mostly short commutes, it will probably be only the Taxi segment who will opt for diesel variants.

[hellmet]

Originally Posted by apachelongbow

HAlthough the govt and the economists hate to admit it, this country is is deep depression and the industry parameters are in doldrums as they were in 1991-1992/pre reforms.

This is economic slowdown. Not a depression. Definitely not.

Personally, I don't want the economy to 'grow'. I want people's lives to better. The 'trickle down' effect that economists argue growth was to bring hasn't happened has it?

[lurker]

there will be no 'trickle down' because of existence of offshore-banks.

In some cases where there genuinely has been 'trickle down' in a sinister sort of way, wherein the newly rich mining barons and rest have indeed spent money in India, it has attracted lot of negative govt attention prompting again the instance in the first para.

[amit]

Petrol in Goa costs Rs.52.10.
Diesel in Goa costs RS.52.70.

Petrol is cheaper then Diesel in Goa.

[sgiitk]

Today the BPCL chap was on the box. Quite sensible and balanced for a PSU chap.

From his figures, Diesel should take another 7-8 months for subsidy to be dropped to Zero. Petrol no under recovery. Had a figure of Rs.379 or something to LPG cylinder.

Now the interesting bit was, he stated that Crude is hardening, Intl price of fuels is hardening, and the rupee is slipping, so everything is Inshah Allah (my words). As for petrol hike/drop on 15th May he was non committal, could be up, down, or no change all depending on the scenario.

[thoma]

Originally Posted by sgiitk

From his figures, Diesel should take another 7-8 months for subsidy to be dropped to Zero.

I've asked a similar question on another thread, but thought will ask here too. Assuming that crude price is coming down slowly, does it really need another 7-8 months for the diesel subsidy to be dropped completely?

The govt. had maintained that diesel should be brought up to ~60/- from ~50/-, then, when petrol was lingering around 72/-; i.e, a 20% difference. Shouldn't this 20% difference hold good at the end of the deregulation?

[sgiitk]

Originally Posted by thoma

1. Assuming that crude price is coming down slowly, does it really need another 7-8 months for the diesel subsidy to be dropped completely?

2. The govt. had maintained that diesel should be brought up to ~60/- from ~50/-, then, when petrol was lingering around 72/-; i.e, a 20% difference. Shouldn't this 20% difference hold good at the end of the deregulation?

1. A big if. Also, the rupee dollar rate comes into play. So depends.

2. When there is no subsidy left then leave it at wherever we are. What the govt says is irrelevant, it was at best a rough guide.

Yes, the reason for the difference is that petrol is far more highly taxed than diesel. After all the aam admi and kisan (read neta) needs only diesel, forget all the two wheelers! Goa with the tourist industry and pollution to worry, has cut VAT on Petrol (not diesel) to near zero.

[Jignesh]

Originally Posted by thoma

does it really need another 7-8 months for the diesel subsidy to be dropped completely? Shouldn't this 20% difference hold good at the end of the deregulation?

Hello Thoma,

1. Given the current Crude prices & Dollar / Rupee rates, Oil markeing companies are making losses of approx Rs. 3 per liter of Diesel. Thus with the government suggested (approved) hike of Rs. 0.50 per month, it will take around 6 month to wipe off this loss.
But say if within this six months, international crude prices rises or Rupee falls against Dollar, the losses will increase from Rs. 3 to say Rs. 4 or Rs. 5 per liter.
Also political events in coming months will delay the planned hike of Rs. 0.50 per month.

2. Regarding 20% difference in Petrol & Diesel prices - ideally in most countries Diesel is priced little higher than Petrol. But due to some very high & absurd taxes on Petrol in India, the price gap between Diesel & Petrol will always remain. Please refer this link to get information on taxes on Petrol in India - http://www.dayandnightnews.com/2011/...t-rs-42-appox/

Thanks,

[jacs]

Any update where is the cheapest in Kerala for Fuel and where is the highest? I was under the impression that Kochi is the cheapest but yesterday while we filled Diesel from Kozhikode, about 20ps less is what we noticed.

Originally Posted by amit

Petrol in Goa costs Rs.52.10.
Diesel in Goa costs RS.52.70.

Petrol is cheaper then Diesel in Goa.

OMG! Very inviting.

[supremeBaleno]

Originally Posted by jacs

Any update where is the cheapest in Kerala for Fuel and where is the highest? I was under the impression that Kochi is the cheapest but yesterday while we filled Diesel from Kozhikode, about 20ps less is what we noticed.

Kochi is indeed the cheapest in Kerala, if you don't count Mahe (which is technically a part of Pondichery).

Prices in various districts of Kerala after the Re1 hike in diesel prices on 10-May-2013 :

Kochi (Ernakulam) : 52.28
Kannur : 52.43
Trivandrum : 52.50
Kozhikode : 52.51
Kottayam : 52.51
Thrissur : 52.66
Palakkad : 52.93

And @ Mahe : 51.13

From Kochi, when you go south till TVM, the prices keep increasing by a few paise for every district in the way - possibly the difference in the transportation cost from the refinery in Kochi. But not sure why the same logic is not applied while going northward, since Kannur and Kozhikode are cheaper than Thrissur and Palakkad. Possibly they get their fuel from Mangalore (MRPL) which is closer to the northern part of Kerala ?

[John]

Petrol is now cheaper than Diesel in Goa! Goa has become the first state where the price of the two fuels have balanced out. See the details in Autocar: http://www.autocarindia.com/News/343...el-in-goa.aspx