[RSR]

Originally Posted by supremeBaleno

The Shell price link shows Rs72 for petrol at Chennai, while current PSU prices seems to be lower by more than Rs2 (Rs.69.59 at some PSU pumps).

Yes, the difference is now ₹ 2.41, which is in the normal price difference range between Shell and the PSU cartel (2.3 ~ 2.5) in Chennai.

Originally Posted by supremeBaleno

Now if only Shell also reduced the petrol prices also or atleast made it same as PSU prices.

I wish they did!

Shell's policy is to generally price their fuels at a slight premium over the PSU horde. The difference varies from city to city, from just a few paise up to three rupees depending on logistics and related factors.

If anything, Shell's price cut on diesel is an early indicator that the PSU cartel is going to reduce its diesel price within a couple of days. I expect the PSU diesel price in Chennai to drop to 60 rupees a litre fairly soon, maybe even below that.

[dass]

Profit on diesel at Rs. 3.59. A cut is imminent.

http://profit.ndtv.com/news/market/a...6-litre-680049

[sgiitk]

Originally Posted by dass

Profit on diesel at Rs. 3.59. A cut is imminent.

Not before the 19th. And it may take a cabinet endorsement to start cutting, and definitely for a deregulation.

[embee]

As per NDTV, the Profit on Diesel Sale Rises to Rs. 3.56/Litre. If the diesel prices are cut, it would be the first cut in five years (That's good news from Modi ji ki sarkar!!) where the Diesel prices are still controlled by the government plus a price cut in diesel fuel would have a direct impact on prices of essential commodities as it is the preferred fuel for the transport sector which in turn will reduce costs of all major daily consumption items. Maybe, we are going slowly and steadily towards deregulation of diesel fuel.

[saurabhkum]

Originally Posted by embee

As per NDTV, the Profit on Diesel Sale Rises to Rs. 3.56/Litre. If the diesel prices are cut, it would be the first cut in five years (That's good news from Modi ji ki sarkar!!) where the Diesel prices are still controlled by the government plus a price cut in diesel fuel would have a direct impact on prices of essential commodities as it is the preferred fuel for the transport sector which in turn will reduce costs of all major daily consumption items. Maybe, we are going slowly and steadily towards deregulation of diesel fuel.

I think this is a not a good news by government instead this is a good news for the government. A 5% cut on diesel will have a nice positive effect on inflation too. The tough measures taken earlier are now delivering result. One thing which is still bothering me is that why on petrol the cut was only 1 rs? As per the crude rate and currency conversion rate it should have been cut at least by 7 rs. Even if we would have cut the rate by 5 rs it would have resulted in reduction of 7 rs inclusive of taxes.

[lurker]

Originally Posted by sgiitk

Not before the 19th. And it may take a cabinet endorsement to start cutting, and definitely for a deregulation.

Yes. 19th of next year. That is when the code of conduct finally gets old and dies a natural death.

After which there shall be series of Rs. 1 cuts on diesel that shall make one's head spin.

[gsurya]

Another factor is INR-USD. Is at 61.48 now, lowest in 5 months. Another couple of rupees cheaper & the gains of cheaper crude will be frittered away.

[hellmet]

Instead of decreasing rates, I would ask the government to "keep the change" and divert the profits into building better public transport infrastructure. Cheaper fuel prices (which I'm sure are a temporary phenomenon of Saudi trying to squeeze Russia and Iraq) will encourage more fuel consumption and more vehicle purchases which will further pollute our air and congest out roads, respectively.

The govt should also start with a Rs.10 increase in (subsidised) LPG cylinder price (like they did for diesel) and decrease the number of subsidised cylinders to 5 or 6. We should be completely off of subsidised fuel as soon as possible. Subsidies deter use and exploration of alternate fuel sources and encourage fuel wastage.

[supremeBaleno]

Originally Posted by RSR;

Yes, the difference is now ₹ 2.41, which is in the normal price difference range between Shell and the PSU cartel (2.3 ~ 2.5) in Chennai.

What I was wondering was, given that Shell does not do any refining and sources fuel from PSU refiners, if they can price diesel cheaper than PSU rate, why not price petrol also cheaper or atleast at same rate as PSU ?

Originally Posted by hellmet

Instead of decreasing rates, I would ask the government to "keep the change" and divert the profits into building better public transport infrastructure. Cheaper fuel prices will encourage more fuel consumption and more vehicle purchases which will further pollute our air and congest out roads, respectively.

Agree with both points. And I would gladly pay current or even more for petrol, if we could see that money channelled into building better roads, MRTS. Metro etc.
But knowing how our politicians are, this extra will only end up lining their pockets.

[RSR]

Originally Posted by supremeBaleno

What I was wondering was, given that Shell does not do any refining and sources fuel from PSU refiners, if they can price diesel cheaper than PSU rate, why not price petrol also cheaper or atleast at same rate as PSU?

That would plunge their Indian unit into the red, as they are purely a marketing company here.

They source their fuels from the PSU refiners who would surely include their margin in the price. On top of that, they have separate transporters with better processes in place, provide a better margin to their retailers (who in turn provide better facilities & pay the pump staff better wages) and of course, Shell has to make a profit on the sale as well. So it's natural that their fuels would end up costing a bit more.

Shell diesel being cheaper is a temporary phenomenon. In a couple of days or so, when the PSU cartel gets the nod from the government to cut diesel prices, PSU diesel will again become cheaper by about a couple of rupees (in Chennai).

Shell has cut prices before the PSU horde only because they are not under the control of the government. Governments controlling prices only results in all kinds of undesirable things for everyone, and holds back the progress of the country.

It's a telling fact that governments that have a fetish for controlling prices all happen to govern Third World countries (this includes most of the defunct Second World). Moreover, when any government goes on a sudden & rabid price controlling spree, it's a sure sign that the economy is on its last legs, and a collapse is sure to follow (e.g. Zimbabwe).

The best and lasting way to control prices is to let the markets decide them. Governments should encourage more competition in every field and business activity, remove hurdles and barriers to new entrants, encourage disruptive new technologies, prevent cartelisation, get rid of market distorting & economy destroying subsidies and put in place strong regulatory agencies that have the interests of the consumers in mind.

How can a government whose subsidiary/associate entities form a cartel and prevent new entrants into the field (other than the government's favourite crony capitalists), ever act in the above manner? As long as such crappy license raj era rubbish remains firmly in place, India is destined to remain a Third World country.

[srinivasmhn]

At shell petrol bunk on Tumkur road(Bangalore), diesel price was listed as Rs 61.75.
It was Rs 66/- yesterday.

[sgiitk]

Originally Posted by srinivasmhn

At shell petrol bunk on Tumkur road(Bangalore), diesel price was listed as Rs 61.75.
It was Rs 66/- yesterday.

They buy from IOC in bulk. Imagine where can Reliance take it!! However, there is a spike in Bent today.

[DRIVE_ADDICT]

Today's diesel price in Shell Chennai (61.50/-) is lesser than IOC/BP/HP :-).

http://www.shell.com/ind/products-se...ing-board.html

[supremeBaleno]

Originally Posted by RSR

They source their fuels from the PSU refiners ...... So it's natural that their fuels would end up costing a bit more.

True all that. But all this logic should apply to diesel too, right ? So how is it that they sell diesel cheaper than the folks from whom they source it ? And if by some way they can sell diesel cheaper, then why not petrol also ? Or is this something to do with the tax structure difference between petrol and diesel.

[narchennai]

Originally Posted by hellmet

The govt should also start with a Rs.10 increase in (subsidised) LPG cylinder price (like they did for diesel) and decrease the number of subsidised cylinders to 5 or 6.

But do people have this mindset? Because its going to hit their pocket directly if LPG is raised and this is where LPG is linked with VOTE BANK in some pockets. Remember the free LPG connection given by Tamil Nadu government in 2007~2010 and the same formula copied by Congress for implementation if it was back to power now, with a scheme under Rajiv Gandhi's name. And worse was that the affluent were given LPG Distributorship under the Rajiv Gandhi LPG Gramin Vittarrak scheme and to my knowledge all these distributors are politicos. whereas the original scheme was to help improve the life standards of under privileged in their own native.

Originally Posted by hellmet

Subsidies deter use and exploration of alternate fuel sources and encourage fuel wastage.

Subsidized product = Large scale diversion possible and pilferage to some extent. So eventually subsidy should go to stop such acts. But are we ready. I doubt?