[sachinayak]

Originally Posted by sachinayak

Surely, govt will announce a sizeable reduction in fuel prices end of this month - perfectly in time for the Delhi elections.

Anyone could have predicted this.

Folks who have been justifying the government action all this while, on how detrimental it would be to reduce the fuel prices now, please care to explain how did the government manage to reduce fuel prices in the last fortnight, when Brent prices have actually gone up.



Refer the chart above for the monthly chart of Brent and please explain, how exactly does this "deregulation" thing work?

[poloman]

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Originally Posted by sachinayak

Anyone could have predicted this.

Folks who have been justifying the government action all this while, on how detrimental it would be to reduce the fuel prices now, please care to explain how did the government manage to reduce fuel prices in the last fortnight, when Brent prices have actually gone up.

Attachment 1336057

Refer the chart above for the monthly chart of Brent and please explain, how exactly does this "deregulation" thing work?

It has been discussed more than 100 times in the thread that there will be lag in pricing of fuels to the pricing of crude. When prices were not reduced, you were dissatisfied, now when prices are reduced, then also you have a problem with that?

[romeomidhun]

IMO,

Originally Posted by poloman

I have been a supporter of the current pricing policy. I tried to illustrate the same in last few pages. But now even I feel the Govt is losing the perception battle very badly having reduced the ATF prices so drastically.

The "newly politicized" corporate team is given with a waiver!

Originally Posted by sachinayak

Folks who have been justifying the government action all this while, on how detrimental it would be to reduce the fuel prices now, please care to explain how did the government manage to reduce fuel prices in the last fortnight, when Brent prices have actually gone up.

Refer the chart above for the monthly chart of Brent and please explain, how exactly does this "deregulation" thing work?

Delhi elections are approaching. Sheer politics is in play.

[srishiva]

Originally Posted by poloman

It has been discussed more than 100 times in the thread that there will be lag in pricing of fuels to the pricing of crude.

Come on! I think he is trying to highlight politics in this, Isn't it?
No ones complaining the reduction.

[sgiitk]

Originally Posted by Vitalstatistiks

Those rates include state levies too and are for Delhi (http://www.business-standard.com/art...0300971_1.html)

Expect higher reduction for states like Maharashtra and Karnataka.

Hope states do not start jacking up VAT. Also, with Brent at around $56 how long will the cuts sustain.

[2500cc]

Rs 2 cut on petrol and diesel effective midnight 4th Feb:
http://timesofindia.indiatimes.com/b...w/46109677.cms

[rajshenoy]

Thanks to Delhi elections, Fuel prices are finally cut Diesel now at 50.xx in Bangalore. I think this will be one of the final cuts before prices start going up

[sachinayak]

@ Poloman,

The problem is
1. We are given too little too late
2. The hypocrisy of the government
3. People trying to justify that reduced fuel price is a favor and not a right as a citizen.

I am okay to live with the first one, if the government maintains that fuel prices are regulated. I completely understand the government too needs to earn revenue since they have fiscal deficit to manage.

HOWEVER when the government is so openly controlling the pricing and timing (for political mileage, which again is something i would anticipate any political party doing) i find the concept of "DEREGULATION" a complete farce.

[poloman]

Originally Posted by sachinayak

The problem is
1. We are given too little too late
2. The hypocrisy of the government
3. People trying to justify that reduced fuel price is a favor and not a right as a citizen.

I am okay to live with the first one, if the government maintains that fuel prices are regulated. I completely understand the government too needs to earn revenue since they have fiscal deficit to manage.

HOWEVER when the government is so openly controlling the pricing and timing (for political mileage, which again is something i would anticipate any political party doing) i find the concept of "DEREGULATION" a complete farce.

First of all I don't have any opinion on this fuel price regulation deregulation business. All these are just number play. What has infuriated me more is the anticipated plan by Govt to do away with LPG subsidy for highest income tax bracket. If implemented this will be gross injustice to the honest tax payers. As far as I know this is the only subsidy people like us receive from the Govt. We are paying substantial chunk of our salary as income tax, service tax, excise tax etc. What are we getting in return.. bad roads, heavy tolls, no health care, no safety net in case of job loss. If Govt has any plan to improve these things then fine, but I am not seeing any efforts in that direction.

[ghodlur]

I dont understand the disparity in the amount reduced for petrol and diesel prices. Every time the price cut is announced there is a difference between the amount reduced for petrol and diesel. Since both the fuel are deregulated should not the drop for both be equal?

Did I say fuels are deregulated, pretty much looks like still in government control.

[drmohitg]

Interesting. When crude was free falling, the prices weren't being decreased or were being countered by increasing the taxes. Now when actually the prices have increased marginally, there is a price drop. Makes me feel that this country should stay in eternal election mode only. Thats the only time when "common man" is the priority.

[joslicx]

A very sensible take on the need for "fixing" fuel prices all over the world.

http://www.economist.com/news/leader...pe/seizetheday

[sachinayak]

Originally Posted by ghodlur

Did I say fuels are deregulated, pretty much looks like still in government control.

This was the topic of discussion at our workplace this morning and an interesting aspect came out. Given the way things have panned, a big beneficiary of this "deregulation" seems to be the government.

Had fuel prices been regulated, the government would not have been able to push for a price cut so close to the election, given the model-code-of-conduct that would kick-in. With the prices deregulated, government does not have any such framework to adhere to. Instead it can time the price cut as and when it wants (in the role of the largest investor/stakeholder in the oil marketing companies).

[reverse_gear]

Originally Posted by sachinayak

Had fuel prices been regulated, the government would not have been able to push for a price cut so close to the election, given the model-code-of-conduct that would kick-in. With the prices deregulated, government does not have any such framework to adhere to. Instead it can time the price cut as and when it wants (in the role of the largest investor/stakeholder in the oil marketing companies).

While I agree with you that deregulation in the current form has been something of a farce till date, I do not think the model code would have prevented them from price change even if there was no deregulation. There has been a policy on petroleum pricing in place (benchmarking to international prices) for many years, so the fortnightly change would have been in routine course. In any case, the price change is for the entire country, while the elections are only in 1 state.

What I would really hope for is a consistent policy that the public can rely on rather than monthly tinkering in taxes, subsidy, etc. If there is a fixed framework for pricing (linked to international prices), which is put in place, then the oil companies can automatically reset prices in line with international prices. Government can decide on the quantum of excise duty, VAT, etc. per litre of fuel and then let it remain at that level for the full year. If they want revisions, they should do it only in the Budget like all other taxes. Otherwise, prices should be left to market movements.

The current situation of regular tinkering is not transparent.

[sgiitk]

Seems thy have a ₹4 buffer on the Petrol price! Somewhat less on the Diesel. But remember Brent has shot up about 20% in the past week.