[RSR]

Originally Posted by supremeBaleno

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.

It's not about the tax structure difference. It's about being free of government control to raise/lower the prices in line with their costs.

What we are witnessing now is NOT Shell being able to sell diesel at a cheaper rate than the PSU cartel. On the other hand, it is the PSU horde selling diesel at a much HIGHER rate than necessary!

The reason the PSU horde dish out is that since diesel is a regulated (i.e. price fixed) commodity, they don't have the freedom to lower the price just as they didn't have the freedom to raise it earlier. At least, that's what they claim. Of course, we know that's not the only reason.

[drpudhi]

Originally Posted by supremeBaleno

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.

Diesel being cheaper in shell now is a temporary phenomenon, because PSU bunks make a profit of more than Rs.3.50/lit now. Once that is reduced after elections, shell diesel will once again be costlier.

[sandeep108]

Shell buys in bulk. It is the retail that is regulated so the PSUs cannot reduce retail pump prices. Since Shell buys in bulk, they are able to get the benefit of the reduced bulk rates and pass on part of that to their customers. Once the PSUs get the Oil Ministry's order to reduce prices (or they may not also to make up for the 'subsidy' so far incurred), then the differential between Shell and PSU pumps will go back to normal.

It is only very surprising that when they are talking about Rs. 2-3/L of diesel, why petrol prices have been reduced only by Re. 1/L.

[sgiitk]

As per the box, the Cabinet at 4:30 today may take up the Diesel issue. I expect only a Rs.2-2.50 cut at this time.

[shamanth]

Diesel is now deregulated and price reduced by 3.37 Rs in Delhi.

[sgiitk]

Diesel deregulated. Price in Delhi cut by Rs.3.37. What it looks like is the Cabinet decided to deregulate and technically the cut is from the OMCs.

Looks like Shamanth and I overlapped.

[AutoIndian]

Originally Posted by shamanth

Diesel is now deregulated and price reduced by 3.37 Rs in Delhi.

Originally Posted by sgiitk

Diesel deregulated. Price in Delhi cut by Rs.3.37. What it looks like is the Cabinet decided to deregulate and technically the cut is from the OMCs.

Looks like Shamanth and I overlapped.

Yes, just now I got a news flash that diesel prices have been deregulated, with a reduction as mention above. I think this is the best Diwali gift from Modi Govt to Indian people. My hard luck, I did a tank full just yesterday, would have saved at least a 100 bucks. Nevertheless this will tame inflation and bring at least some reduction in food and vegetable prices.

[drmohitg]

Cheers to the good news. Finally the prices are deregulated. Quite a swift decision by the government as I had a feeling that they will drag this on further for sometime. A very welcome relief.

[gsurya]

Interesting mix of decisions; if Diesel is fully deregulated like Petrol, great.

• Diesel will be 3.50 INR cheaper
• CNG will be 3.50 INR costlier
• LPG will be costlier too - not known by how much, yet

IMO Govt should promote CNG/LPG use in transport over more polluting diesel, even if it has to cross-subsidize; just like promoting electric vehicles.

[i10]

Excellent decision to deregulate, though I doubt this would reduce the prices of essential commodities.

I wonder when petrol will be TRULY deregulated.

[Fornax]

M&M and Tata Motors have fallen over 5-8% in thr past couple of trading sessions. Clearly there is a general perception that "Diesel" engine advantage is over. Let the vehicle and its core qualities only determine its saleability.

FYI, I would love to take the Honda India board group photo tommorrow. Took them forever to get the D engine out, and just like that their "advantagr" has been snatched away.

[Hayek]

Great decision assuming they follow through and allow Rs. 3 increases in a fortnight if oil prices start rising again, or the Rupee depreciates. My fear is that we give away hard fought price increases now, but OMCs do not raise prices when needed due to elections some place or the other. Perhaps they should set it in stone by admitting that any government instruction to PSUs on prices is a violation of relevant corporate governance norms and will lead to the minister or bureaucrat giving the instruction having been deemed to have committed a criminal offence.

[rajshenoy]

Diesel cheaper by 4 rupee in Bangalore. I should have guessed this when Shell reduced by 4 Rs too.
Diesel is de-regulated too.. So it will be interesting to see if it is truely open market or govt will keep a strict check during Elections and inflation time

[Simhi]

Great decision. Hope private players chip in, provide employment and improve efficiency and provide diesel and petrol at competitive prices.
And also hope government sticks to its policy and does not reverse it in future due to political compulsion.
Indirectly, in long term inflation should come down and interest rate also should go south.

[StarScream]

Modi sarkar is scaring me - the decisions are coming too fast. I'm not used to this pace!

Now for some investment in refining capability so that we get cleaner technologies with ultra-low sulfur diesel and finally progress from Euro-4 standards.