[ajman28]

Originally Posted by wildsdi5530

Consider this: the rumor mills have been contemplating at a huge price rise in petrol and Diesel prices. And now diesel is 22 Ps. higher. So everyone heaves a huge sigh of relef. This trend continues ad infinatum. Perhaps the govt. employs people to spread these false rumors. The 22ps. will still raise your costs by 0.08%. This fact is absorbed by 'the benovalent govt. which didn't raise price of diesel by Rs. 2 as we feared' mentality

That is a nice thought! So we do have top notch management gurus sitting in the parliament.

On a serious note: A few years back the government used to regularly alter the price of fuel once every 15 - 30 days. The fluctuation used to be minimal (from 1p to 90p). The impact of the price change was very gradual which is very good. You will not find a situation where one day you go to the market and find that a kg of tomato costing double of what it was a week back. The complete financial planning of both individuals and companies go haywire when the price of fuel is increased by 2 - 5 Rs a litre.

The government should switch back to the old system of correcting the prices every 15 days or so.

[xingamazon]

Originally Posted by ajman28

The government should switch back to the old system of correcting the prices every 15 days or so.

Frankly government increasing the price is a sure shot solution. But no government had ever dared to agree on the financial situation and accepted to increase the price.

The next option atleast what I can think of is to scrap the current mode of excise rates and provide more benefit to hatches with better milage,
the two advantages I see are:
1. It would induce the companies to bring in more researched fuel efficient technologies
2. Additional incentives would make cars like Reva practically own-able for
people who are really environment oriented

But mind you I would want this to happen only for small cars / hatches, lest we would end up with Rich people buying better FE cars at lower rates etc. Which would not help the economics much. I guess..

[xingamazon]

Dint see this coming so soon, we started this topic only a week before and here it is Indian government has decided to regulate the price in line with world market price.

The amount of increase is anyway known, but what not many people are realizing is the fact that this is not just a price increase, but in fact its a price deregulation.

So in effect, everytime there is an increase in the global market its going to affect Indian price too, so we might be seeing price increase almost every week.

[airbender]

First, xingamazon appreciate you for using the words taxpayers money instead of governments money. That itself shows a persons thinking. I rarely see people using the words taxpayers money in India.

Government should leave the prices of fuels to the market. Deregulating price of petrol is a good half step in the right direction. That should be followed by deregulating diesel also very soon. Other wise it will skew the balance in diesel's favor leaving the first half step of no value.

[GeekSrik]

Interesting article extract from ibn website:

Prime Minister Manmohan Singh on Tuesday rejected the Opposition's criticism of the Government's decision to hike fuel prices, saying the move to free petrol and diesel rates was "much needed" reforms and that there should be no "excessive populism".

"The fact that petrol prices have been set free, the same is going to be done to the diesel prices, was much needed reforms," he said on board a special aircraft while on his way back home from Toronto where he attended the G20 Summit.

The Government on June 25 decontrolled petrol prices, resulting in a Rs 3.50 a litre increase in rates in Delhi, and raised diesel prices by Rs 2 a litre in preparation for an eventual decontrol.Besides, domestic LPG prices were hiked by Rs 35 per cylinder and kerosene rates went up by Rs 3 per litre, the first increase in the poor man's cooking fuel in more than 8 years to cut government subsidies.

"And the adjustment that has been made in the prices of kerosene and LPG was also necessary, considering the very high amount of subsidy that is implicit in their pricing structure," he said.

Freeing diesel prices from government control would result in rates going up by another Rs 1.50 per litre but no time frame has been set for doing so. The Prime Minister was replying to a question on the government's decision Friday to effect an increase in the prices of petroleum products to cut losses for oil marketing companies and whether it indicated that the government was getting ready for tougher reforms and further deregulations.

[wildsdi5530]

Couple of queries:
1: Does this mean that when global oil prices go down, our costs also go down? Or is it like a one-way valve?
2: Where does the extra 120% charged by the govt. go?
3: How many of us know that the food we eat are partly alms from the govt.? I think I'll switch over to salads. subsidized LPG.. every one in india is a beggar. Our national occupation is beggary.
When wil we be allowed to live with self-respect earning our own up-keep?

[echo77]

Originally Posted by wildsdi5530

Couple of queries:
1: Does this mean that when global oil prices go down, our costs also go down? Or is it like a one-way valve?
2: Where does the extra 120% charged by the govt. go?
3: How many of us know that the food we eat are partly alms from the govt.? I think I'll switch over to salads. subsidized LPG.. every one in india is a beggar. Our national occupation is beggary.
When wil we be allowed to live with self-respect earning our own up-keep?

1: Yes. Not one-way.
2: Ever noticed how big the MP tummies are?
3: We are a tax + subsidy economy. Even the water you use is subsidized.

[xingamazon]

Originally Posted by wildsdi5530

Couple of queries:
1: Does this mean that when global oil prices go down, our costs also go down? Or is it like a one-way valve?
2: Where does the extra 120% charged by the govt. go?
3: How many of us know that the food we eat are partly alms from the govt.? I think I'll switch over to salads. subsidized LPG.. every one in india is a beggar. Our national occupation is beggary.
When wil we be allowed to live with self-respect earning our own up-keep?

Answers to your question:
1. Yes you are right, but going by the way market has performed, the current prices are pretty low already.
2. Thats one of the sources of income of Govt, just like any tax they collect, its an excise tax. Since invariably the crude and petrol are imported. They invite higher tax slabs
3. Dont feel so bad. Its nothing new even some developed markets have this. Nothing wrong with it, after all what govt earns is also our collective income at the end of the day.

Originally Posted by echo77

3: We are a tax + subsidy economy. Even the water you use is subsidized.

In developed markets the drinking water is processed thro RO and provided to homes at what you can say as subsidized rates. There are few corporations which provide water quality equal to Mineral water that we have, so nothing wrong with it either.