Fuel prices may drop soon

TrueDreamer · 24th October 2008, 17:54

I don't think Shell has cut down the pricing yet.

ethanhunt123 · 24th October 2008, 19:02

Shell Premium Petrol is 62.45/Litre in Bangalore now. Dunno about the PSU pricing.

MadhuG · 24th October 2008, 19:32

Shell has not cut prices yet. I would go back to shell the moment they cut prices to PSU levels...1 or 2 rs. more than PSU level is fine. The petrol is so good. My 'Bluebird' (recently bought Santro) would love that.

snaronikar · 24th October 2008, 19:58

Quote:

Originally Posted by m8002?

hi, any updates on the prices of shell fuel? Has it come down to the PSU levels now?

Nope. They have reduced again and it now stands at Rs.62.43/ltr. Still way ahead of PSUs. And if PSUs still reduce further, then either they have to reduce costs forcefully or they have to close down.

magesh_kumar · 24th October 2008, 20:09

the price cutting will also depend on the decision of OPEC members meeting being held in vienna. they control close to 40 % of the entire oil out put in the world

anantnehru · 25th October 2008, 10:28

Quote:

Originally Posted by magesh_kumar

the price cutting will also depend on the decision of OPEC members meeting being held in vienna. they control close to 40 % of the entire oil out put in the world

Well they planning on cutting production, so dont think that there is any price cut in sight.

MuzzledMoose · 25th October 2008, 11:01

today in paper petroleum minister has told that nobody has told that next week prices will be cut. :P

indian21r · 25th October 2008, 17:35

Quote:

Originally Posted by anantnehru

Well they planning on cutting production, so dont think that there is any price cut in sight.

@ anantnehru,

OPEC has lost its control over the oil prices. Now they are more dependent on other external factors and the speculators. Further the current slowdown will decide how low the prices can go. Too high prices cannot be sustained in the current market, so we can expect low prices is the coming days.

vasudeva · 25th October 2008, 18:02

Quote:

Originally Posted by indian21r

@ anantnehru,

OPEC has lost its control over the oil prices. Now they are more dependent on other external factors and the speculators. Further the current slowdown will decide how low the prices can go. Too high prices cannot be sustained in the current market, so we can expect low prices is the coming days.

As in currency and other free markets, no single entity can really control the price, as OPEC has found out repeatedly. When prices have to go up, no matter how much OPEC increases output, it goes up; and conversely. OPEC only controls around 30% of world supply, and it is not known for cartel discipline.

snaronikar · 25th October 2008, 18:15

Currently the prices are coming down and unfortunately OPEC is not able to do anything. They already have tried cutting down the output, but the oil prices are still falling. Hope this will help India in a big way. Atleast our PSUs will make some money. But govt has to reduce the price. With the opposition mounting pressure and common man (aam aadmi) watching the price situation, they cannot hold on to the current price for long. They have to do something and if they do not then it will be ome an election issue and the govt also knows about this.

The sooner they take the decision the better it will be for them.

iraghava · 25th October 2008, 18:41

Today's crude price is $64 a barrel.

vasudeva · 25th October 2008, 18:53

At $64/bbl, and 1 barrel=159 litres (approx), and exchange rate of 50, 1 litre of crude= Rs. 20/litre. Add refining margins (vary based on demand-supply) but $5-10/bbl, and you get approx Rs. 23 per litre of refined oil. Refining costs vary based on type of crude and what product it is refined into. But this should give a rough estimate of costs of crude+refining. Add overheads, commissions, transportation, and the biggest component (taxes). Hope this basic calculation is correct.

At 140/bbl and $ at 43 (in say July), the cost of crude was Rs. 44/litre without refining. That was being sold at a huge loss in India. Sep 2008 average was around $92/bbl.

However, now there should be a profit on a going forward basis, but perhaps `price stabilisation' means we get protected on the upside but do not get the full and immediate benefits of the downside.

snaronikar · 25th October 2008, 19:07

Quote:

Originally Posted by vasudeva

However, now there should be a profit on a going forward basis, but perhaps `price stabilisation' means we get protected on the upside but do not get the full and immediate benefits of the downside.

A common man doesn't understand this calculations. What they see is the crude price coming down and they want the price of petrol/diesel to come down.

Also govt is facing elections this year & next year. They have to take a political decision.

CBlazer · 25th October 2008, 21:43

The governments past and present have resorted to political decisions even when the best qualified people have held important positions in the cabinet. No one has the guts to take a hard decision for the long term good of the country.

Probably the govt. may end up implementing the dual pricing of diesel. No one will be interested in opposing this anyway.

nitrous · 25th October 2008, 21:53

Quote:

Originally Posted by Cblazer

the govt. may end up implementing the dual pricing of diesel. No one will be interested in opposing this anyway.

That govt. will never ever gain power after that.

24th October 2008, 17:54	#31
TrueDreamer BHPian Join Date: Nov 2007 Location: Hyderabad Posts: 276 Thanked: 16 Times	I don't think Shell has cut down the pricing yet.
	() Thanks

24th October 2008, 19:02	#32
ethanhunt123 Senior - BHPian Join Date: Aug 2006 Location: Bangalore Posts: 1,384 Thanked: 1,033 Times View My Garage	Shell Premium Petrol is 62.45/Litre in Bangalore now. Dunno about the PSU pricing.
	() Thanks

24th October 2008, 19:32	#33
MadhuG BHPian Join Date: Oct 2008 Location: CHENNAI Posts: 86 Thanked: 9 Times	Shell has not cut prices yet. I would go back to shell the moment they cut prices to PSU levels...1 or 2 rs. more than PSU level is fine. The petrol is so good. My 'Bluebird' (recently bought Santro) would love that.
	() Thanks

24th October 2008, 20:09	#35
magesh_kumar BHPian Join Date: Oct 2004 Location: Bangalore Posts: 39 Thanked: Once	the price cutting will also depend on the decision of OPEC members meeting being held in vienna. they control close to 40 % of the entire oil out put in the world
	() Thanks

25th October 2008, 11:01	#37
MuzzledMoose BHPian Join Date: Nov 2007 Location: MalluLand Posts: 220 Thanked: 75 Times	today in paper petroleum minister has told that nobody has told that next week prices will be cut. :P
	() Thanks

25th October 2008, 18:15	#40
snaronikar Senior - BHPian Join Date: Jun 2007 Location: Bengaluru Posts: 2,845 Thanked: 29 Times View My Garage	Currently the prices are coming down and unfortunately OPEC is not able to do anything. They already have tried cutting down the output, but the oil prices are still falling. Hope this will help India in a big way. Atleast our PSUs will make some money. But govt has to reduce the price. With the opposition mounting pressure and common man (aam aadmi) watching the price situation, they cannot hold on to the current price for long. They have to do something and if they do not then it will be ome an election issue and the govt also knows about this. The sooner they take the decision the better it will be for them.
	() Thanks

25th October 2008, 18:41	#41
iraghava Senior - BHPian Join Date: Oct 2005 Location: Bhaiyyaland Posts: 8,033 Thanked: 265 Times View My Garage	Today's crude price is $64 a barrel.
	() Thanks

25th October 2008, 18:53	#42
vasudeva Senior - BHPian Join Date: Mar 2007 Location: Delhi Posts: 2,221 Thanked: 212 Times	At $64/bbl, and 1 barrel=159 litres (approx), and exchange rate of 50, 1 litre of crude= Rs. 20/litre. Add refining margins (vary based on demand-supply) but $5-10/bbl, and you get approx Rs. 23 per litre of refined oil. Refining costs vary based on type of crude and what product it is refined into. But this should give a rough estimate of costs of crude+refining. Add overheads, commissions, transportation, and the biggest component (taxes). Hope this basic calculation is correct. At 140/bbl and $ at 43 (in say July), the cost of crude was Rs. 44/litre without refining. That was being sold at a huge loss in India. Sep 2008 average was around $92/bbl. However, now there should be a profit on a going forward basis, but perhaps `price stabilisation' means we get protected on the upside but do not get the full and immediate benefits of the downside.
	() Thanks

25th October 2008, 21:43	#44
CBlazer BHPian Join Date: Sep 2006 Location: Bangalore Posts: 596 Thanked: 17 Times	The governments past and present have resorted to political decisions even when the best qualified people have held important positions in the cabinet. No one has the guts to take a hard decision for the long term good of the country. Probably the govt. may end up implementing the dual pricing of diesel. No one will be interested in opposing this anyway.
	() Thanks