[anjan_c2007]

The northward movement of petrol and diesel prices are expected to continue for the next few months. OPEC has decided to reduce production in view of the lesser crude oil demand that has lately fallen a wee bit.

Perhaps, this is mainly due to the fracking of shale to extract oil, by the US. Shale in some rock formations has been found to be oil bearing and the oil is mined by fracking the shale in drill holes. Though environmentalists had expressed some reservations, the US is producing a lot of its oil from shale and is reducing its crude oil import bill.

In India, the ONGC has done fracking of shale for gas (not oil) in one well of the four drilled in the Damodar Valley Coalfields in 2013 and has reported some success. The Geological Survey of India (Jharia coalfield) and Oil India Limited are also into exploration of natural gas bearing shale lately. India has vast areas with such coal bearing rocks and if explored properly, we may report good reserves of natural gas.

With the US taking the lead in oil production from shale , the demand for crude oil is expected to fall.

http://fortune.com/2016/11/14/donald...-us-shale-oil/

Hence after the free fall in crude oil prices over the past one year or more, now if OPEC reduces production, the prices will go northward.

And every fortnight, we are expected to see a rise.

[Vik0728]

Petrol up by Rs 0.42 and diesel up by Rs 1.03

OT:

Got back from a 700Km round trip to Kerala over an Extended weekend and all I needed was one tank full of fuel, ~2500/-.

And guess what, the MID still shows a range of over 200Kms

With 105BHP, 250NM Torque and a fuel range of over 900Kms...


I CAN SMILE EAR TO EAR EVEN IF THE DIESEL WAS PRICED AT 100 BUCKS A LITRE

[CarguyNish]

Originally Posted by Vik0728

And guess what, the MID still shows a range of over 200Kms

With 105BHP, 250NM Torque and a fuel range of over 900Kms...


I CAN SMILE EAR TO EAR EVEN IF THE DIESEL WAS PRICED AT 100 BUCKS A LITRE

That's the beauty of these VW TDI engines, the way they deliver performance with minimal consumption is amazing. I am happy that 2 such examples are with us in the garage, and they are indeed damn good one's.

Regarding Price hike, I was expecting around ₹1-2, but it was less than that.

[sgiitk]

@CarguyNish; If I remember not so long ago VW had a 3L model, meaning consumption 3L per 100km, ie 33 plus kpl in our terms. In Europe the preferred way of measuring consumption is Litres per 100km. The lower the number, the more economical the car.

[ragh_bhushan]

I remember paying exactly Rs. 50/L for Diesel during the first fill-up of my truck in February 2016. Less than a year later the price has skyrocketed to almost Rs. 65/L without any respite likely in near future.

The trend is certainly bothersome but us petrolheads won't be pausing our revvin', now would we?

[sgiitk]

@ragh-bhushan; With the fortnightly revisions we are getting used to price changes. I hope Brent is now in the $55-56 range, but following the Trump effect I do not see any firm direction in the exchange rates. One other positive is that our Inflation is in the sub 4% region, which is not at all bad. So that will not impact exchange rates much. However our interest rates are still too high. Let us see Herr Patel handle this, with minimal impact on inflation. I expect the demonetization will help him here. I very mush prefer higher fuel prices rather than high inflation.

As for Diesel pricing I expect it to be part of a strategy to discourage Diesel.

[condor]

There is some talk of reducing excise duty. There were 9 straight increases to increase the price - apart from the usual hikes due to international crude prices. Hope this happens

It is also possible that a reduction in excise may be used to off-set the charges for using cards.

[sgiitk]

Originally Posted by condor

There is some talk of reducing excise duty. There were 9 straight increases to increase the price - apart from the usual hikes due to international crude prices. Hope this happens

It is also possible that a reduction in excise may be used to off-set the charges for using cards.

The card issue has a two fold solution.

1. As is the case worldwide the MOCs have to negotiate a more favorable rate from the card companies.

2. Dealer / OMC margins must be increased to absorb the charges.

Excise increases started when states starting with UP and Delhi started defining (imho an oxymoron) Floor VAT. Of course we are in a tight monetarist economy so any reduction in Excise must be compensated elsewhere to keep inflation in check. We have to keep our inflation below 4% else there can be serious damage.

[Thilak29]

During last 12 months, my need for long drives increased considerably and I drove over 20,000 km. With such usage, rising fuel prices made me read more about it. I even ended up filing a RTI request and what I found in reply stunned me.
Back in Jan,2014 - excise duty levied per liter of unbranded petrol was Rs 9.20 and today it is Rs 21.48. For Diesel, it increased from Rs 3.46 to Rs 17.33. Beside this tax component, VAT component for petrol increased from 20% to 27 % and for diesel 12.5 % to 16.75%. Additionally, we pay 2% education cess and 1% higher education cess in taxes. Fuel is literally cash cow for governments.Tax terrorism!

[ptaneja]

I am assuming another increase in price this time as well ? Or will it be postponed to next slot because of upcoming budget ?!

[sumzup]

Originally Posted by ptaneja

I am assuming another increase in price this time as well ? Or will it be postponed to next slot because of upcoming budget ?!

It might not happen at all for two reasons, there is a directive from the highest office in US given to the oil producers of United States to go full steam to unsettle the OPEC so the proposed/planned drop in the output by the cartel might not happen. Secondly, there is a lot of pressure on the Indian Govt to hold the prices if not reduce it for at least the whole of February due to political compulsions which includes but not restricted to the elections.

There may be a reversal shortly if the international crude softens on the back of US-backed increased output which could definitely benefit us all for however long. Cheers

[lapis_lazuli]

Very strange, that not a word is being written or discussed on prices, now that the rates have remained constant for almost a month.

On a side-note, fuel price in Pakistan, has been raised, and that's the first search result when I looked up for "petrol price".

Some countries expect an overall reduction in March retail pricing. Wonder what it will be for India.

[sandsun7]

Originally Posted by lapis_lazuli

Very strange, that not a word is being written or discussed on prices, now that the rates have remained constant for almost a month.

Rates may remain unchanged till March 8th at least - That is when the UP Assembly elections end.

[sgiitk]

Originally Posted by sandsun7

Rates may remain unchanged till March 8th at least - That is when the UP Assembly elections end.

There is a hefty ₹86 upwards revision of LPG prices. So Petrol and Diesel should follow suite. I am wondering that with the INR below the 68 mark (in fact the trend is mildly south) , and crude prices steady what is going on.

[sandsun7]

Originally Posted by sgiitk

There is a hefty ₹86 upwards revision of LPG prices. So Petrol and Diesel should follow suite. I am wondering that with the INR below the 68 mark (in fact the trend is mildly south) , and crude prices steady what is going on.

Even I was wondering the same, when neither the crude price, nor the Rupee value has changed so much, why such a steep hike on LPG. Could it be a new kind of cross subsidy? Higher margins on non subsidized LPG used elsewhere?