[Daewood]

Originally Posted by DieselFan

Diesel cars are priced higher because it costs more to produce one. Not that the manufacturers are making more money out of it. Engine, Fuel pumps, transmission, clutches, turbos are expensive. more expensive than the petrol counterparts.

Manufacturers are charging a premium on Diesel engines in India.
i.e much more than it actually costs over a petrol engine.

This is according to Mr. Subbu, the former president of Hyundai India.
And car makers can very well absorb atleast half of the extra cost if at all Government levies a 80k tax.

This article which appears in Rediff is a condensed form of today's main article in Business Standard. And it carries opinions of industry leaders including Mr.Subbu.

[pgsagar]

subsidies, subsidies, subsidies!!! where the hell are subsidies if a 25 rupee litre petrol at factory gate sells for 55? a 30 rupee tax extorted from its citizens, and they still talk of subsidy? why don't they come up with figures as to what is being subsidised by how much? will they be happy if they price diesel at 100 and petrol at 150 per litre? No, after six months they will start crying about subsidies again. our govt. is bent on making its' citizens lives miserable. they jsut want to tax it to stratosphere so that more money flows into coffers from where our "netas" can loot. why can't our govt. see that lower taxes means more development and more overall revenue collection. it is strange to see the well-read and informed teambhpians bititng this subsidy story hook, line and sinker.

oh and BTW, this new diesel surcharge of 80,000 per car now will slowly be inflated to 1.5 to 2 lakhs per car a few years down the road, with each passing budget seeing 25 to 40 thou addition. and that will kill diesel hatchbacks ( this amount will not affect Mercs and BMWs as much because 1.5 to 2 lakhs can easily be absorbed in 50-60 lakhs cars ).

[ImmortalZ]

Originally Posted by tsk1979

Has anybody noticed that if prices were deregulated, even then diesel would be much cheaper than petrol.
From a crude import point of view, if more people started using diesel cars, due to higher efficiency, import bill would reduce. Thats why europe encourages diesel cars. Their carbon footprint is less, and they give better efficiency!

You're making the classic mistake of thinking about only the carbon dioxide emissions. Diesels create a lot more of the poisonous kind of emissions that no one seems to give two hoots about.

Easiest way to destroy your lungs? End up beside a diesel HGV when the driver floors it.

[Daewood]

Originally Posted by DieselFan

I do not get the reason for flat tax on all cars from Swifts to Mercs. Not at all justified.

Whether a car costs 3 lakhs or 3 crores, that doesn't change the way fuel is burnt.
What ultimately matters is how much fuel is burnt.

So taxing people in terms of litres of fuel spent is the right option.
Since we can't have seperate rates for commerical and private diesel vehicles, as it would lead to black marketeering and more corruption, the next best option is to have tax slabs according to the fuel effienciency of cars.

In fact most of the cars which cost more than a crore burn very little fuel as the number of kms they travel per year is very less compared to a vehicle like indica or swift.

[imp!]

If fuel is deregulated, the car manufacturers are going to have a fit. It doesn't cost that much more to build a diesel engine, and the extra refining to obtain petrol from oil doesn't cost a whole lot more than obtaining diesel. As a result, the price of diesel and petrol will normalize with a minimal difference between the two. How on Earth will these companies manage to sell over priced diesels?
Of-course it is highly doubtful this will happen as the needs to keep diesel fuel costs down is paramount in the politicians mind for various polling reasons. Taxation policies will change accordingly.

[Gansan]

Originally Posted by pgsagar

subsidies, subsidies, subsidies!!! where the hell are subsidies if a 25 rupee litre petrol at factory gate sells for 55? a 30 rupee tax extorted from its citizens, and they still talk of subsidy? why don't they come up with figures as to what is being subsidised by how much? will they be happy if they price diesel at 100 and petrol at 150 per litre? No, after six months they will start crying about subsidies again. our govt. is bent on making its' citizens lives miserable. they jsut want to tax it to stratosphere so that more money flows into coffers from where our "netas" can loot. why can't our govt. see that lower taxes means more development and more overall revenue collection. it is strange to see the well-read and informed teambhpians bititng this subsidy story hook, line and sinker.

oh and BTW, this new diesel surcharge of 80,000 per car now will slowly be inflated to 1.5 to 2 lakhs per car a few years down the road, with each passing budget seeing 25 to 40 thou addition. and that will kill diesel hatchbacks ( this amount will not affect Mercs and BMWs as much because 1.5 to 2 lakhs can easily be absorbed in 50-60 lakhs cars ).

The prices of Petrol and Diesel cross subsidize those of Kerosene and domestic LPG, but results in adulteration of diesel with kerosene. In fact fuel prices are the milch cow for raising revenue for so many other things. For instance the subsidy paid for Urea is almost five times the (regulated) market selling price of that product.

Higher taxes on diesel cars are welcome. Diesel prices are pegged down as transportation of all commodities depends on it, but a lot of diesel is consumed by private diesel cars, many of them luxury sedans. In effect a junior level employee driving a Hero-Honda or an Alto subsidizes the fuel of his MD's Mercedes! It is basically wrong.

Originally Posted by ImmortalZ

You're making the classic mistake of thinking about only the carbon dioxide emissions. Diesels create a lot more of the poisonous kind of emissions that no one seems to give two hoots about.

Easiest way to destroy your lungs? End up beside a diesel HGV when the driver floors it.

+1 to this. Diesels are more efficient than petrol engines, but also pollute more.

Originally Posted by Daewood

Whether a car costs 3 lakhs or 3 crores, that doesn't change the way fuel is burnt.
What ultimately matters is how much fuel is burnt.

So taxing people in terms of litres of fuel spent is the right option.
Since we can't have seperate rates for commerical and private diesel vehicles, as it would lead to black marketeering and more corruption, the next best option is to have tax slabs according to the fuel effienciency of cars.

In fact most of the cars which cost more than a crore burn very little fuel as the number of kms they travel per year is very less compared to a vehicle like indica or swift.

This surmise is flawed. A Merc may return 7 KMPL, while an Indica 20 KMPL. Also, the ability to pay of both owners is not the same.

IMO there should be an extra levy on diesel cars first. Then it can vary according to the FE of the car.

[JMaruru]

Centre And States Pocket 51 Paise As Taxes On Every Rupee You Pay For A Litre Of Petrol
-------------------------------------------------------------------------------------------------

Ever wondered why oil companies keep complaining about mounting losses even as you shell out more at fuel stations. The reason being that every time you tank up, the Central and state governments get richer at your expense. Consider this, each rupee you spend on buying petrol in Delhi, almost 51 paise out of that goes to the two governments by way of various taxes and surcharge. In case of diesel, they walk away with about 24 paise of every rupee. This will vary marginally in other cities due to the difference in state taxes.
A back-of-the-envelop calculation shows that on a national average price of Rs 47 per litre of petrol, you pay approximately pay Rs 26 as taxes. Similarly, taking an average countrywide price of Rs 35 for diesel, around Rs 13 goes to the government’s kitty.
Admittedly, these are ballpark figures and there are many variables such as the rupee exchange rate and varying efficiency of refineries besides other cost build-ups.
The story gets better with cooking gas because it has been given the status of ‘declared goods’. This means states cannot use it as a milch cow and levy a uniform 4% sales tax against an average of 21% on diesel and 27% on petrol. So out of an average price of Rs 300 for a cylinder, the governments get about Rs 11 as taxes, while they get about 40 paise from sale of each litre of kerosene that costs close to Rs 10 a litre.
Taking an average crude price of $69 a barrel, a rough calculation shows that the leftover after paying taxes and other costs does not even cover the cost of buying crude. For example, the cost of crude comes to about Rs 23 a litre but the companies are actually left with Rs 21 after accounting for other costs and commissions, from sale of each litre of petrol. Similarly, they get around Rs 22 from each litre of petrol.
The Budget on Friday raised customs duty on motor fuels by 5% to 7.5% and also slapped the excise duty by Re 1 a litre. It also slapped a 5% customs duty on crude. These moves created an impact of Rs 2.71 a litre on petrol and Rs 2.55 on diesel. The actual hike of retail prices were a little higher due to incremental increase in other surcharge and local levies.
At the pre-budget rates, major Central tax components on petrol included the basic cenvat duty of Rs 5.35 a litre, special additional excise duty of Rs 7, additional excise duty of Rs 2, a notional basic customs duty at 2.5%, additional customs duty (countervailing duty) of Rs 5.35 plus Rs 6 special additional duty as well as an additional customs duty of Rs 2. In addition, a 2% education cess is also charged.
On diesel, the Central taxes include a Rs 1.60 basic cenvat duty, additional excise duty of Rs 2, a notional basic customs duty at 2.5%, additional customs duty (countervailing duty) of Rs 1.60 and an additional customs duty of Rs 2.
The states, too, add their bit as sales tax and pollution cess. Among the states, Andhra Pradesh has the highest fuel tax rate of 33%, followed by Tamil Nadu with 33% and Maharashtra 30%. Haryana has the cheapest tax rate of 9%. A majority of the remaining states tax fuels between 18 and 28%.

-- TOI Dated 28 Feb 2010

[mxx]

Originally Posted by pgsagar

subsidies, subsidies, subsidies!!! where the hell are subsidies if a 25 rupee litre petrol at factory gate sells for 55? a 30 rupee tax extorted from its citizens, and they still talk of subsidy? why don't they come up with figures as to what is being subsidised by how much? will they be happy if they price diesel at 100 and petrol at 150 per litre? No, after six months they will start crying about subsidies again. our govt. is bent on making its' citizens lives miserable. they jsut want to tax it to stratosphere so that more money flows into coffers from where our "netas" can loot. why can't our govt. see that lower taxes means more development and more overall revenue collection. it is strange to see the well-read and informed teambhpians bititng this subsidy story hook, line and sinker.

oh and BTW, this new diesel surcharge of 80,000 per car now will slowly be inflated to 1.5 to 2 lakhs per car a few years down the road, with each passing budget seeing 25 to 40 thou addition. and that will kill diesel hatchbacks ( this amount will not affect Mercs and BMWs as much because 1.5 to 2 lakhs can easily be absorbed in 50-60 lakhs cars ).

U see, running a country needs money. That is why taxes. It is no rocket science, or high end economics, just common sense.
Subsidies are just one part of it there are lot of other areas where this is spend.
Further the subsidies on petrol and diesel is not much compared to the subsidies on cooking fuels LPG/Kerosene.
Please dont compare with US, this is not the US.

And please, can to stop this "looting neta" conspiracy theory. It is so boring. Cmon, if you dont like the job of netas, join politics.

[samsan02]

Found a link to this report. Good analysis. This could have a major impact on diesel car sales and resale values, when new diesel cars tend to cost more resale values will also move up. But I doubt if this will get implemented ever, imagine all car manufacturers failing to sell much of diesel cars because there wont be many takers. And these companies have invested a lot in diesel engines so Govt can't let these car mfrs suffer losses just like that.


Source: http://petroleum.nic.in/reportprice.pdf

This is what they are suggesting for Diesel cars:

Petrol and diesel used in cars, including SUVs, are for final consumption. The higher excise duty on petrol compared to diesel encourages use of diesel cars. While greater fuel efficiency of a diesel vehicle should not be penalized, a way needs to be found to collect the same level of tax that petrol car users pay from those who use a diesel vehicle for passenger transport. An additional excise duty on a diesel vehicle corresponding to the differential tax on the petrol should be levied. At the present excise rates, the additional excise duty paid by a petrol vehicle owner who on an average drives 8000KM/year and gets an average mileage of 13.5 KM/litre is around Rs.10000 per year. The present discounted value at 10% discount rate over the 10-year life of a vehicle would be around Rs. 67,500, and at 5% discount rate it would be Rs. 81,000. An appropriate discount rate would be the rate on Government bonds. An additional excise duty calculation based on the following model, adjusted for the existing differential, if any, in excise duty between petrol-driven cars, and diesel-driven cars, should be levied on diesel car owners.

Additional Excise = (Rate of Excise on petrol – Rate of Excise on Diesel) x (Petrol

consumption per year by an average petrol car user) x [{(1+r)/r]} x {1-(1/(1+r)10 }]
where ‘r’ is discount rate and 10 years is assumed lifetime.

At the present rates and a discount rate of 5 per cent, an additional excise duty of Rs. 80,000 should be levied on diesel driven vehicles. Some persons may still opt for a diesel vehicle if they expect to drive much more than an average petrol vehicle owner does. That should not be discouraged.

[Johnn]

Originally Posted by ImmortalZ

You're making the classic mistake of thinking about only the carbon dioxide emissions. Diesels create a lot more of the poisonous kind of emissions that no one seems to give two hoots about.

Easiest way to destroy your lungs? End up beside a diesel HGV when the driver floors it.

The new diesel engines have green credentials - pl see
[IMG]file:///C:/DOCUME%7E1/HOMEGA%7E2/LOCALS%7E1/Temp/moz-screenshot-3.png[/IMG]
[IMG]file:///C:/DOCUME%7E1/HOMEGA%7E2/LOCALS%7E1/Temp/moz-screenshot-1.png[/IMG][IMG]file:///C:/DOCUME%7E1/HOMEGA%7E2/LOCALS%7E1/Temp/moz-screenshot-2.png[/IMG]pl see pg 63 fig 10.2
http://www.whatgreencar.com/content/...10_03_2006.pdf

HYUNDAI i20 Manual 5-speed 1.4l CRDi 66kW engine CO2 Emissions & Ratings At What Green Car
42 WhatGreenCar Rating
[COLOR=#01D300]0 greenest[/COLOR] to [COLOR=#EE0008]100 most polluting[/COLOR]

Green Car Ratings Methodology – Full CO2 & Emissions Impact Ratings at WhatGreenCar.com


Hyundai I20 1.4 CRDI Comfort 5dr Diesel Hatchback Online Internet Deal

• Engine
  • Diesel particulate filter

CO2 (g/km) 110 HC+NOx 0.144 Particles 0.001 Standard Euro Emissions EURO 5

Fuel Economy & Emissions (Hyundai I20 1.4 CRDI Comfort 5dr Diesel Hatchback)

These days your green credentials can define you as a person - so what will this car say about you? Be sure to check out the fuel economy and emissions of this new car and compare it to any others you may have on your wish list before you buy.
Fuel Economy

Environmental Information

A guide on fuel economy and CO2 emissions which contains data for all new passenger car models is available at any point of sale free of charge*. In addition to the fuel efficiency of a car, driving behaviour as well as other non-technical factors play a role in determining a car's fuel consumption and CO2 emissions. CO2 is the main greenhouse gas responsible for global warming. * This guide is provided courtesy of Department for Transport; please see their link at the bottom of this page for applications.
CO2 emission figure (g/km)

CO2 BANDB110g/km Fuel cost (estimated) for 12,000 miles

A fuel cost figure indicates to the consumer a guide fuel price for comparison purposes. This figure is calculated by using the combined drive cycle (town centre and motorway) and average fuel price.
Re-calculated annually, the current cost per litre is as follows - petrol 112p, diesel 113p and LPG 62p (VCA March 2010)
£916 VED for 12 months

Vehicle excise duty (VED) or road tax varies according to the CO2 emissions and fuel type of the vehicle.
£20.00 Make/Model: Hyundai I20 1.4 CRDI Comfort 5dr Diesel Hatchback Engine Capacity (cc): 1396 Fuel Type: Diesel Transmission: 5 SPEED MANUAL Fuel Consumption:



Drive cycle Litres/100km Mpg
Urban 5.1 55.4 Extra-urban 3.8 74.3 Combined 4.2 67.3
Carbon dioxide emissions (g/km): 110

Important note: Some specifications of this make/model may have lower CO2 emissions than this. Check with your dealer.