Fuel price updates thread

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mehrotra.akash said:
In theory atleast, whats wrong with the following scenario?

a) Remove ALL subsidies and taxes on petrol and diesel

b) Due to high Diesel rate, retail prices go up

c) High retail prices compensated to a large extent by lower Petrol prices for most households (over long term: 8-10 years or so)

d) Loss of govt. income compensated by increased amount of sales taxes since they are charged as a percentage, and when the price goes up, so will the taxes

e) Without the mess of taxing something to subsidise something else and then taxing the subsidised item again, the system will be more efficient, lesser overheads so the tax revenue will increase even more.
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I have a much better idea

How abt we let the rupee rise against the dollar....

What RBI does is it starts mopping up/buying dollar in the market when dollar rates fall so as to prevent rupee from rising.

what if RBI doesn't intervene when dollar falls.

Check this scenario.

If $1 = 50 Rupees

1 barrel crude oil = $100 that's Rs. 5,000/- per barrel of crude oil that turns out to say Rs. 80/- per litre of Petrol (including refining costs, taxes etc )

NOW IF

If $1 = 25 Rupees

1 barrel crude oil = $100 that's Rs. 2,500/- per barrel of crude oil that turns out to say Rs. 40/- per litre of Petrol (including refining costs, taxes etc )

The rise in Rupee will have a bad affect on certain sectors which rely heavily on dollar rates such as export sectors etc but this will be limited and majority population will benefit. The large mining scams are occurring mainly because of high dollar rates. Why the hell are we mining so much iron ore and then exporting it.
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Re: Petrol price increased by Rs3.14 per litre.

mehrotra.akash said:
c) High retail prices compensated to a large extent by lower Petrol prices for most households (over long term: 8-10 years or so)
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No. A Majority of poor households don't even have a two wheeler, leave alone a car. Cheaper petrol prices will do nothing for them. Not justifying the hike, but that's how it is.
JAK said:
If $1 = 25 Rupees

1 barrel crude oil = $100 that's Rs. 2,500/- per barrel of crude oil that turns out to say Rs. 40/- per litre of Petrol (including refining costs, taxes etc )
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I hope you were joking. If RBI were to fix the rate of a dollar at 25/- the demand for dollars would be insane. Rupee is a weak currency and everyone will be scrambling to convert their rupees into dollars. THe RBI would need to provide all these dollars. It can't. Argentina tried a similar stupid move and pegged their currency 1:1 against the dollar. Everyone started selling off peso's and buying dollars.
 
Re: Petrol price increased by Rs3.14 per litre.

vivek.krishnan said:
Another blow to our wallets! Time to place the govt on the firing squad.

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Reduce taxes on petrol or no vote next time.
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They will reduce it and once the election is done they will raise it again.
 
Re: Petrol price increased by Rs3.14 per litre.

This government is a BAD negotiator! (Leave apart the useless corruptions, anna should have stood for inflation, i' would have backed him ;) ) This government's democratic moto is - Of the people, by the government, from the people! :@
 
Re: Petrol price increased by Rs3.14 per litre.

I$=Rs. 25.

Our salary will also be reduced to half of what we get. Isn't it ? ;)
 
Bikes petrol tank is almost fully empty today. Should've got off my ass and filled last night ....

On the bright side, thank god I don't have a V12 Ferrari :-)

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Re: Petrol price increased by Rs3.14 per litre.

People who have a V12 Ferrari also have sufficient money for Petrol :P
 
Re: Petrol price increased by Rs3.14 per litre.

rocker123 said:
Next time ill surely vote for the party which has the cycle logo.. :)

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Mate, been trying to PM you for the last couple of days. Please clear your inbox.
:)
 
Re: Petrol price increased by Rs3.14 per litre.

if rupee rises against dollar, all your jobs will go. just think. most of the income coming is is through software development by hundreds of companies here whose main selling point is low cost instead of quality. so if rupee rises and comes close to the dollar, companies outsourcing their work here will feel that they now have to pay more compared to earlier. so they will naturally shift to brazil, argentina, mexico, china, vietnam, taiwan where there are companies which do the same work you do for lot less. and they're learning to read and write english too.

also if you think export oriented companies will allow the govt to hike the rate of rupee, then you're mistaken. these top guns in industry will stop funding the electoral party's in hundreds of crores like they do now.
 
Re: Petrol price increased by Rs3.14 per litre.

I wish that actually happened to some extent. We need to grow our own industries now, outsourcing doesn't get us anywhere in the long run besides a quick buck. There are so many industries we can actually do pretty well in but instead we use our resources doing someone elses work and for a pittance.
 
Re: Petrol price increased by Rs3.14 per litre.

In order to suppress the recent unrest from its allies, Govt. thinking of reducing the prices of Petrol by ONLY 50p :no: in a fortnight or so.

Source: Front Page ET.
 
Re: Petrol price increased by Rs3.14 per litre.

Can some one explain to me the economics behind oil prices in India? Why is oil in India so expensive compared to other countries?

BTWI wish they began making diesel powered bikes again like Sooraj, Java, Yezdi! Those were classics and gave very good mileage.
 
When our Prime Minister Dr. Manmohan Singh said GDP will rise this year, he actually meant Gas Diesel and Petrol.
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sunny27 said:
Can some one explain to me the economics behind oil prices in India? Why is oil in India so expensive compared to other countries?

BTWI wish they began making diesel powered bikes again like Sooraj, Java, Yezdi! Those were classics and gave very good mileage.
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Following is the break up of cost calculated by the Indian government.

Basic Price is around 48% - 50% of the original cost, then Excise duty, Education Tax, Dealer commission, Crude Oil Custom duty, Petrol Custom, Transportation Charge & marketing.

Based on the above calculation the price of crude is only around 36-40% of the total price that we pay at the pumps.

If the oil companies are at a loss, then how is it that they declare high dividends for their share holders?

IOC, gifted their current employees and retired employees gold coins. So then, how can a company that is projected to suffer losses of several crores per day give such large gifts?

The government is just putting this picture of loss. Its true that these 4 products, namely petrol, diesel, kerosene and LPG are given on subsidy and the company does suffer a loss on them. But these companies produce other products and by products of the refining process such benzene and toluene etc, which makes huge profits for them. Hence, the company on the overall is not at a loss but make profits.

Moreover, the governements taxes on fuel accounts for more than 50% of the cost. The government is making a fool of all of us.

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Re: Petrol price increased by Rs3.14 per litre.

Basic Price is around 48% - 50% of the original cost, then Excise duty, Education Tax, Dealer commission, Crude Oil Custom duty, Petrol Custom, Transportation Charge & marketing.
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Can you provide a detailed breakup of petrol price components. I think a large part of the price is for the oil marketing bonds. These bonds are provided to the oil companies to subsidize necessary fuel such as diesel and kerosene.

Why do you think India is one of the only countries where petrol price is 50% more then diesel? In almost all developed nations diesel price is 10% higher approximately. Increasing diesel price is not an option, as it would sky rocket the inflation (as transportation cost of all basic amenities will increase). Kerosene is used by a majority of population yet as a cooking fuel, hence price increase there would severely hamper that strata. However with the huge price differential between diesel and petrol now, almost everyone is buying a diesel vehicle (and thus getting subsidized), the only way out is to put additional tax on diesel vehicle sales to cover for the subsidies.

In addition you have to understand, that almost all developed nations have hedged themselves against fuel price deviations (through various oil derivatives, and purchase contracts with the oil producing nations). Our country through the excuse of protection prohibits the oil companies to enter into longer term derivatives contracts.

So yes, basically petrol folks are gonna get screwed multiple times over to cover for the losses on diesel and kerosene. And there is nothing the government can do about it.
 
Re: Petrol price increased by Rs3.14 per litre.

As the prices in Delhi are ~Rs.69/Litre, 15Rs. goes towards the Excise tax, 12.50 Rs. to state govt & Rs.1.50/Lite to the dealer leaving the rest ~Rs.40/Litre to the oil companies.

some kinda petrol bashing going on in TBHP as well :: LINK
 
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