Originally Posted by Economic Times - (Relevant Extracts) NEW DELHI: The government said it may eliminate diesel and gasoline subsidies as soon as July, quicker than expected, ending a policy that had crushed state refiners' profits, strained government finances and inflated oil demand. The move, which one state oil executive said would trigger a 5 percent rise in prices if made today to match $65 crude oil, is one of many important reforms expected from the government, and suggests it is ready to take difficult but important steps in order to balance growth with fiscal prudence. Pricing freedom would increase tax revenue and remove massive subsidies bills, helping offset the cost of economic stimulus measures that have stretched public finances and widened the fiscal deficit to 6.1 percent of GDP in 2008/09 (April/March). But it could hurt industry accustomed to below-market prices, raising input costs at a tough time. India's economy grew 6.7 percent in 2008/09, a six-year low, and economists say it is set for a recovery from the second half of this fiscal year. Oil prices rose above $65 a barrel on Friday, taking gains to 27 percent in May, the biggest one-month gain in a decade, and analysts say the market seemed focused on the bullish sentiment and brighter macroeconomic outlook. But because India barely cut prices during crude's long decline, current petrol prices would only rise by about 5 percent if the government ended controls on pricing, a senior Indian Oil Corp official told Reuters. Eliminating subsidies would also open a domestic opportunity for private sector firms Reliance Industries and Essar Oil to shut down their petrol stations, struggling as customers bought cheaper fuel from subsidised state rivals. Market-driven prices would help curb fuel use in India, one of the only major consumers expected to see positive demand growth this year. India's oil product consumption, a proxy for demand, has risen about 47 percent in last decade to 133.44 million tonnes in 2008-09. India's largest oil retailer, Indian Oil Corp, sees diesel demand rising 4-5 pct, petrol demand up 8-9 pct and overall demand rising 3-4 pct this fiscal year. |
Originally Posted by SLK
(Post 1326706)
I hate such articles, which just see one side of the coin. They don't seem to see the indirect taxes the government is charging on the fuel. I do not have numbers to support this, but I'am sure the amount of subsidy they give is much less than the indirect taxes they collect from oil. And then they claim to be running a deficit because of fuel prices? |
Every 42-US-gallon barrel of crude provides a little more than 44 gallons of petroleum products. This is gained due to processing of crude. From one barrel we get (in gallons): * 7.27 gallons (27.5 liters): Other products (feedstocks for petrochemical plants, asphalt, bitumen, tar, etc.) * 1.72 gallons (6.5 liters): Liquefied Petroleum Gases (LPG) * 3.82 gallons (14.5 liters): Jet Fuel * 1.76 gallons (6.6 liters): Heavy Fuel Oil (Residual) * 1.75 gallons (6.6 liters): Other Distillates (Heating Oil) * 9.21 gallons (35 liters): Diesel * 19.15 gallons (72.5 liters): Gasoline |
Originally Posted by Max
(Post 1326865)
WikiAnswers - What products do you get out of a barrel of crude oil Total income = approx rs.8652.5 total cost = approx 3120 = 278% profit / tax? WOW. huge profit! so we are paying nearly 3 times for petrol? |
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