[srishiva]

The govt first needs to think about resource mobilization across various sectors. They don't have to depend on petrol/diesel for taxing alone.
The current inflation is not due to fuel costs.

[man_and_machine]

Originally Posted by shankar.balan

If you compare Fuel prices with Europe, most would get a heart attack at how cheap we get fuel here.

No. That comparison is not fair as you need to look at comparative pricing of products (like food, electricity etc) v/s the fuel charge. That determines the buying potential and spending potential on say, fuel. A loaf of bread will cost your about .89 Euro and 1 litre of fuel 1.3 Euro ( fuel = 1.5 X Bread), now take the indian scenario Bread = 20 Rs (even the best quality) and Fuel = 76 Rs (Bangalore) Fuel = 4 X Bread. So when inflation is calculated the math gets twisted because of the parity difference here.

The way our imports and domestic produce are related the fuel price of 76 is not justifiable.

[simplyself]

One cannot compare fuel prices of one country to the other unless all things related to economy are exactly the same.

Mr. Basu may have his personal opinion about decontroling diesel prices. Living on Rs.32/day too may infuse him with a few more insights into the life of vast majority of people of this country.

[civic-sense]

Originally Posted by man_and_machine

No. That comparison is not fair as you need to look at comparative pricing of products (like food, electricity etc) v/s the fuel charge. That determines the buying potential and spending potential on say, fuel. A loaf of bread will cost your about .89 Euro and 1 litre of fuel 1.3 Euro ( fuel = 1.5 X Bread), now take the indian scenario Bread = 20 Rs (even the best quality) and Fuel = 76 Rs (Bangalore) Fuel = 4 X Bread. So when inflation is calculated the math gets twisted because of the parity difference here.

The way our imports and domestic produce are related the fuel price of 76 is not justifiable.

The earlier comparison is fair because both UK and India buy crude at the same price (probably from the same source, as well). On the contrary, the comparison to bread is not not fair because:

1) Bread is not the staple food of Indians, while it is in UK
2) India and UK do not get wheat flour at the same price.

[Chetan_Rao]

As long as we're governed by policy-makers who can't see beyond the next elections, nothing's going to work.

We as a nation had everything to become a superpower in the 6 decades since Independence, but we threw it all away and continue to do so with our short-term, vote-bank policy making. How long before petrol crosses from 'uncomfortable' to 'unaffordable'? How long before the govt goes from compensating diesel subsidies to compensating petrol production itself, because no one wants it or worse, can afford it?

[civic-sense]

Originally Posted by Chetan_Rao

As long as we're governed by policy-makers who can't see beyond the next elections, nothing's going to work.

Why blame the policy makers for that? Blame the electorate. It is them, who can't see beyond populist schemes. The govt just delivers what we want.

[GordonGekko]

Most places the world over, diesel prices are higher than petrol. In India, diesel is subsidised because it is the backbone of the transport industry. Losses are incurred on diesel, hence the bright idea is to increase petrol prices. So, in reality a small percentage of petrol users are actually subsidising the diesel users. It is almost criminal to own a petrol car these days!

[Anarchy83]

Originally Posted by GordonGekko

Most places the world over, diesel prices are higher than petrol. In India, diesel is subsidised because it is the backbone of the transport industry. Losses are incurred on diesel, hence the bright idea is to increase petrol prices. So, in reality a small percentage of petrol users are actually subsidising the diesel users. It is almost criminal to own a petrol car these days!

Wow - this is news to me Gordon. The bit about:

a) In most places world over, diesel prices are higher than petrol. Can you name a few such places?
b) Losses are incurred on diesel - where exactly is this loss incurred?
c) In reality, a small percentage of petrol users are subsidizing petrol - how exactly did you come to this conclusion?

Looking forward to your facts and figures to substantiate these bits of information.

[GordonGekko]

Originally Posted by Anarchy83

Wow - this is news to me Gordon. The bit about:

a) In most places world over, diesel prices are higher than petrol. Can you name a few such places?
b) Losses are incurred on diesel - where exactly is this loss incurred?
c) In reality, a small percentage of petrol users are subsidizing petrol - how exactly did you come to this conclusion?

Looking forward to your facts and figures to substantiate these bits of information.

Are you trying to come at me bro

[Aroy]

US is one country where diesel is more expensive.

Losses alluded to are to the government, because of lesser taxes

Look up the links in my post about news item You will get the tax components and the raw material cost. The lower taxes on diesel are compensated by higher taxes on petrol. The loss is due to the fact that after taxing the fuel to the hilt, the Government decides to give a subsidy, so that on paper the oil marketing companies are selling below the price. As an example, you give a subsidy of Rs.10 to the company, so that the company sells at 30 what it should sell at 40. Now slap a tax of 20 and you have selling price of 50 on what costs 40 with a subsidy of 10. Now you are selling at a loss!

[Anarchy83]

Originally Posted by GordonGekko

Are you trying to come at me bro

Nah - just wondering. I've traveled a little bit, but it was limited to APAC. Didn't come across any country where diesel was more expensive than petrol. Having said that, I'm assuming that you must have been referring to someplace in the western world. Just wanted to figure out where exactly diesel is more expensive than petrol, and this figure out why exactly is it cheaper there.

The other 2 questions are statements I have often heard (diesel is loss-making and petrol users subsidize diesel) but I have yet to see a single factual statement substantiating it.

I'm personally of the opinion that the last two statements are hear-say and not based on any actual research - again, not saying that you started it but more along the lines of people repeating what they've heard without actual proof about it being true.

However, feel free to ignore the query if this sounds insulting to you...

Originally Posted by Aroy

US is one country where diesel is more expensive.

Losses alluded to are to the government, because of lesser taxes

Look up the links in my post about news item You will get the tax components and the raw material cost. The lower taxes on diesel are compensated by higher taxes on petrol. The loss is due to the fact that after taxing the fuel to the hilt, the Government decides to give a subsidy, so that on paper the oil marketing companies are selling below the price. As an example, you give a subsidy of Rs.10 to the company, so that the company sells at 30 what it should sell at 40. Now slap a tax of 20 and you have selling price of 50 on what costs 40 with a subsidy of 10. Now you are selling at a loss!

Thanks for pointing this out Aroy. I've got a breakup of the tax components from the US.



Now, our fellow TBhpian (antz.bin) has gone to great lengths to explain the price structure of fuel in India at this post:

http://www.team-bhp.com/forum/indian...-analysis.html

Have a look through - I found it quite informative. However, I still can't get a clear tax break-up of diesel. Does anyone have this info similar to the US data I've posted above?

[shankar.balan]

good point!
agree with you inthis context.

Originally Posted by man_and_machine

No. That comparison is not fair as you need to look at comparative pricing of products (like food, electricity etc) v/s the fuel charge. That determines the buying potential and spending potential on say, fuel. A loaf of bread will cost your about .89 Euro and 1 litre of fuel 1.3 Euro ( fuel = 1.5 X Bread), now take the indian scenario Bread = 20 Rs (even the best quality) and Fuel = 76 Rs (Bangalore) Fuel = 4 X Bread. So when inflation is calculated the math gets twisted because of the parity difference here.

The way our imports and domestic produce are related the fuel price of 76 is not justifiable.

[man_and_machine]

Originally Posted by civic-sense

The earlier comparison is fair because both UK and India buy crude at the same price (probably from the same source, as well). On the contrary, the comparison to bread is not not fair because:

1) Bread is not the staple food of Indians, while it is in UK
2) India and UK do not get wheat flour at the same price.

he..he...bread was an example, you can substitute it with any thing else that is a food commodity (from the item considered for basic inflation accounting). The premise is the basic comparison on cost of essential goods (including fuel).'

Hey, and by the way the figures are from Germany (UK is still not on Euro :-) )

[Chetan_Rao]

Originally Posted by civic-sense

Why blame the policy makers for that? Blame the electorate. It is them, who can't see beyond populist schemes. The govt just delivers what we want.

I'm all for fixing collective responsibility, but it's unfair to expect them to vote with a wider world-view, when most of the 'electorate' is so poor, illiterate, hopeless and desperate that they're ready to vote for anyone who promises to put food on their tables (if they had any tables). What seems like 'populist schemes' to us is sometimes their only hope for survival.

Wondered why the governments never care what people like you and me think? Because we aren't their 'electorate'. Their electorate is the desperate man on the street who'll trade his vote for a decent meal or a 100-buck note, not because he wants to, but because he has nowhere else to go. If you think that justifies the kind of governance we're getting, I can only feel sorry for all of us.

[wildsdi5530]

Petrol vs diesel wars have been going on for a long time now. I remember my uncle cribbing about it when petrol was 26/- and diesel was 15/-. But back then purchacing power was not as present days and diesel was not abused. Only people who really has an advantage bought diesel. Even now cars which run >3000kms per month will find diesel better, but the city dwellers who drive <20Kms a day, are just enriching the govt. and car companies by buying diesel cars. They will never recover the 1L premium they pay, not to mention additional costs of service. And the thing i hate most about a diesel- the hard clutch, get a leg pain everyday, wonder how people drive diesel cars in the city with their traffic jams. I think a massive reeducation of the ecconomics of car ownership will do more for the petrol diesel war than anything else.
I drive a ford figo tdci about 130 kms a day and 100 kms on Sundays. A 2000 km weekend trip every month for which I use the Honda city.