[TusharK]

Petrol and diesel prices in India have reached a 3-year high following a spike in the international crude oil prices. According to reports, recent hurricanes that have hit southern and south-eastern United States have caused refineries in the area to shut down resulting in the jump in fuel prices.

Fuel prices are at their highest since August 2014. On September 14, 2017, petrol is priced at Rs. 70.39 per litre in Delhi. That's a hike of Rs. 2.31 per litre since August 15, 2017. Meanwhile, diesel is priced at Rs. 58.74 per litre compared to Rs. 57.30 per litre a on August 15, 2017.

It's a similar story in other cities in the country. Petrol prices in Kolkata and Chennai are at their highest since January 2017. In Mumbai, petrol and diesel have been priced at Rs. 79.50 per litre and Rs. 62.40 per litre respectively. Since July 1, 2017, the prices of petrol and diesel in the city have risen by Rs. 5.18 per litre and Rs. 3.77 respectively.

Since June 2017, fuel prices have been revised on a daily basis depending on international rates and taking into consideration the fluctuations in currency exchange rates. Additionally, the government has decided to keep petrol and diesel out of the ambit of GST. However, the petroleum minister has suggested that the GST Council should consider bringing petroleum products under the new tax structure.

Source: Economic Times

Link to Team-BHP News

[i74js]

Making political observations is out of bound in this forum, but I see no reason for

1. Keeping fuels out of GST

2. The present price of gasoline and diesel when the crude prices are reasonably low in the in the international market and OPEC is under tremendous pressure to find buyers for crude from stable economies with consistent / increasing demand

3. It is interesting that India is sole supplier of finished petroleum products to Bhutan (earlier Nepal too) and Bhutan (IOCL - Bhutan) is selling it cheaper compared to Indian companies. Indians in North Bengal use fuel IOCL station of Phuntsholing to buy cheaper fuel.

[Thilak29]

Here is some data points based comparison if fuel to ever be under GST https://factly.in/projected-petrol-a...ent-gst-rates/

[arunramaswamy]

Originally Posted by Thilak29

Here is some data points based comparison if fuel to ever be under GST https://factly.in/projected-petrol-a...ent-gst-rates/

I think a 25% additional cess will be comfortably added to the GST price. I would not be surprised if it is probably more.

[sgiitk]

@ashish89; So Assam is the designated flag bearer. I can see the issue with Ethanol (widely varying rates and rules) I for one see no reason in the fuels. Rates should be force frozen for all. Now GST is for real so some force element should be used.

[ashlil]

Soon enough, you will hear one of the brilliant ministers explaining to the followers that they are increasing the fuel prices as they want to encourage EVs.

[Lobogris]

Please review the list for diesel prices in the world in the link provided below. It is shocking to see that India has the highest prices apart from European nations. We are paying around 1 US$ per litre while most other countries are paying 1/4th of that.

http://www.globalpetrolprices.com/Bhutan/diesel_prices/

[LordSharan]

Although these pics are from BJP twitter handle, I'd like experts here to comment on how close to reality these points are?





This link from India Today says that if petrol/Diesel came under GST, the prices would come down to 51/39 INR/L respectively How is it even possible?

WHAT IF PETROLEUM COMES UNDER GST

Under GST, the petrol and diesel prices under the present circumstances will become substantially cheaper. The GST regime provides for taxation rates of 0, 5, 12, 18 and 28 per cent. Petrol and diesel can't be expected to be taxed below 12 per cent.

At 12 per cent GST, the petrol will be sold at Rs 38.1 in Delhi - almost Rs 32 cheaper than the current rate for one litre of the fuel. At 18 per cent, petrol will be 40.05 a litre in Delhi while at 28 per cent, it will cost Rs 43.44 per litre.

If the SUV compensation cess is imposed over and above 28 per cent GST on petrol, it will cost Rs 50.91 in Delhi - still about Rs 20 cheaper than the existing rate.

As for diesel, its current price in Delhi is Rs 58.72 per litre. At 12 per cent GST, diesel will sell at Rs 36.65 in the national capital. At 18 per cent GST, diesel will cost Rs 38.61.

At 28 per cent GST, diesel will cost Rs 48.88 in Delhi and if SUV cess is imposed, the customers will have to pay Rs 49.08 for a litre of the fuel - still Rs 9.64 cheaper than the existing rate.

But, bringing petroleum products under the GST involves politics. Under the GST Act, the decision to bring petroleum products under the new taxation regime can only be taken by the GST Council which has heavy representation from states, which are not ready to let go the hen laying golden eggs.

[anubhav22]

If you believe GST is created to bring taxes down think again!!!
There will be n number of cess at varying level to fill coffers.
No reform is ever created to reduce earnings.
If international prices are reason, just check what was in 2013 and now with even reduced dollar rate.

[CarguyNish]

Originally Posted by LordSharan

Although these pics are from BJP twitter handle, I'd like experts here to comment on how close to reality these points are?

Attachment 1676402

Attachment 1676403

Yes, these points are true. All these points are valid reasons for Fuel Prices to shoot up.

Although, we get Fuel from Arab, the bigger contributor is the US. With the hurricanes, some have closed down, cannot recall the numbers. And Petrol was most expensive when it was decontrolled in year 2012. In April 2012, Petrol price was highest. Current price although more then 3 months back isn't close to what it was in 2012.

Originally Posted by LordSharan

This link from India Today says that if petrol/Diesel came under GST, the prices would come down to 51/39 INR/L respectively How is it even possible?

It's very simple, the lone reason why Petroleum Products & Liquor haven't been included in GST is because of their tax bracket. Don't know about Liquor, but the Fossil Fuels are taxed at 54%. And you don't have a 54% Tax slab in GST.

If at all Council decides to include it under GST, the maximum it can attract is 28%, this will result in the prices going down substantially. 51/39 is a possibility if GST applies for this.

I can see this happening only if Govt (Central) is not keen on other sources (Bio Fuel/Hydrogen/Electric) etc. If it becomes a reality, then expect prices to go down while Import Costs to go up like rocket leading to losses for both Govt. & OMCs, thus making Fuels non viable.

Looks like they are giving us sign's that Electrification is the only way forward, at least for Automobile Industry.

[ashis89]

Originally Posted by ashis89

The rise in international fuel prices is also linked to hurricane Harvey. According to a report below, this hurricane has forced 23% of the crude refinery capacity of US to go offline. Due to the sharp fall in demand of crude oil, the crude prices are falling. At the same time, demand for fuel is rising in US which is jacking up the fuel prices.

The refineries and the traders in Asia and Europe are enjoying windfall gains. Low crude oil prices reduce their input cost while demand from US to import fuel has ensured much higher selling prices.

http://www.livemint.com/Industry/y7M...-for-fuel.html

IMO, these high prices would continue for a few months until demand stabilizes and all the oil refineries are operational.

Quoting myself, the recent hurricanes have been responsible for the spike in international oil prices. Since our fuel prices are linked to these numbers, we continue to see a rise in our fuel prices. It would take some time before the US refinery are up and running to their maximum potential.

[jaaz]

Originally Posted by LordSharan

Although these pics are from BJP twitter handle, I'd like experts here to comment on how close to reality these ?

Since, the source is declared, it's anyone's guess. Marketing guys hide the negative points, but Political parties openly and shamelessly lie.

Now, coming to the facts:-

Average Crude price in the month of September, 2013 = $112
Average Crude price in the month of September, 2017 = $ 54

USD - INR, September, 2013 = ₹63.00
USD - INR, September, 2017 = ₹64.00

With this basic data, even an uneducated person who knows simple mathematics can conclude the blatant lies of the twitter post.

Above topic has already been discussed extensively, since 2014 onwards, when the govt. levied an additional tax of approx. ₹25/- on each litre of Fuel, the purpose of which is not disclosed till date.

Note: September, 2017 data is approx. for 11 days.
August, 2017 Average Crude price is $46-48.
USD - INR prices are average for the month and rounded off to ₹1.

[rambo1o1]

Originally Posted by ashis89

Quoting myself, the recent hurricanes have been responsible for the spike in international oil prices. Since our fuel prices are linked to these numbers, we continue to see a rise in our fuel prices. It would take some time before the US refinery are up and running to their maximum potential.

Originally Posted by CarguyNish

Yes, these points are true. All these points are valid reasons for Fuel Prices to shoot up.

Although, we get Fuel from Arab, the bigger contributor is the US. With the hurricanes, some have closed down, cannot recall the numbers. And Petrol was most expensive when it was decontrolled in year 2012. In April 2012, Petrol price was highest. Current price although more then 3 months back isn't close to what it was in 2012.

Agreed that the hurricanes caused oil prices to spike but fuel prices in India have been increasing even before Harvey hit the gulf coast.
I remember watching on TV when oil was at its all time low, the finance minister jaitely was adamant on increasing excise to prevent people from consuming too much cheap petrol, hence increasing oil imports.

Now oil prices are higher and the government has forgotten those excise hikes.. Instead of blaming state governments, most which are bjp ruled now the government should remove all central excise duty since according to them GST would be sufficient to pay for all infrastructure.

Add to that a chaotic opposition that cannot do anything and we are in for a ride until the next big elections when miraculously fuel prices start to drop...

[Dennis]

But why are our fuel prices linked to the end product diesel and petrol prices of US / UK?
Do we not buy the source crude oil directly either sweet/sour and heavy/light from oil producing nations? Should not the price formula be dependent on it's demand "alone"? RIL may have significant efficiency of scale which can cause the end product to be far cheaper than if say Shell or Exxon refines it. This linking of prices to global petrol and diesel prices is incorrect in my opinion, and should be directly linked to crude oil which is our input. Multiple costs can be attributed to the cost of petrol/diesel in each country and should not be a direct bearing on our prices. Stating that the hurricanes in the US, have distorted their refining capability should effect our prices, especially if we are not bidding for US refined end-products.

(I do remember though that recently, due to a refinery shutdown in Chennai, BPCL/HPCL was directly importing Diesel/Petrol, but I believe that is a one off case.)
Doesn't make sense to sell Chappati at a price of 60 just because it is sold for 2$ in US/Dubai where minimum legal wage is 8$/hour(504/Rs/hour), when our labour cost is around 100Rs/hour.

[lurker]

Originally Posted by LordSharan

Although these pics are from BJP twitter handle, I'd like experts here to comment on how close to reality these points are?

Attachment 1676403

Dear poster, kindly calculate the distance of all these countries from Persian Gulf and then compare with distance from Persian Gulf to port in west coast of India like Mumbai, Kandla, Jamnagar, Mundhra or Kochi.

Then you will know why this graph is nonsense/irrelevant/diabolic.


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