Stuge Posted August 4, 2011 Share Posted August 4, 2011 NEW DELHI: With passenger cars consuming about 15 per cent of the diesel, the Government today indicated that it might do away with the subsidy enjoyed by such vehicle owners. "...we can accept your (Opposition) suggestion and try to work out what mechanism could be found out so that this section (diesel car owners) are not subsidised," Finance Minister Pranab Mukherjee said replying to a debate on price rise in the Lok Sabha. The Government gives a subsidy of Rs 6.08 per litre on diesel. While the prices of petrol are linked to market rates, the government directly and indirectly compensates the oil marketing companies for losses on account of sale of diesel, kerosene and LPG through subsidies and oil bonds. Under pressure to keep its finances under control the government has already indicated that it was keen on freeing prices of diesel and cooking gas (LPG) but retaining subsidy on kerosene which was used by poor. In June, while increasing prices of kerosene, diesel and LPG, the government had slashed customs and excise duties on petroleum products to mitigate the impact of price hike on common man. It took a revenue hit of Rs 49,000 core per annum. India imports about 75 per cent of its total crude oil requirement. Mukherjee said out of total consumption of diesel, 10 per cent is used by industry, 6 per cent by railways, 12 per cent by the agriculture sector and 15 per cent by car owners. As much as 8 per cent is used for power generation, he said, adding buses and trucks consume 12 per cent and 37 per cent respectively. Mukherjee said that despite price increase of petroleum products in the recent past, the under recoveries of state owned oil companies was still around Rs 1.22 lakh crore.p That's because while petrol prices are linked to market rates, the government gives a subsidy of Rs. 6.08 per litre on diesel. Read more at: http://profit.ndtv.com/news/show/car-owners-may-soon-have-to-pay-more-for-diesel-166787?cp http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/car-owners-may-not-get-subsidised-diesel-government/articleshow/9480258.cms Link to comment Share on other sites More sharing options...
Holysmoke Posted August 4, 2011 Share Posted August 4, 2011 Thats great news. Link to comment Share on other sites More sharing options...
Shane Posted August 4, 2011 Share Posted August 4, 2011 So how would this work? Cars and travels wont get the subsidy, whereas the trucks and heavy vehicles would? Link to comment Share on other sites More sharing options...
Clarke Posted August 4, 2011 Share Posted August 4, 2011 This should have been done long time back. Anyone remember the times when Petrol was more than thrice the price of Diesel ? A Diesel E class was cheaper to run from point A to B than a Bajaj scooter in terms of fuel costs. Link to comment Share on other sites More sharing options...
Holysmoke Posted August 4, 2011 Share Posted August 4, 2011 So how would this work? Cars and travels wont get the subsidy' date=' whereas the trucks and heavy vehicles would?[/quote'] Pretty much. Buying a diesel car? Link to comment Share on other sites More sharing options...
Shane Posted August 4, 2011 Share Posted August 4, 2011 I dont know how I feel about this, considering the rise in the petrol prices, I was considering a diesel variant as the next one, but a difference of around 18 Rs vs the maintenance cost in a diesel variant, I guess it should even things out again. Link to comment Share on other sites More sharing options...
Clarke Posted August 4, 2011 Share Posted August 4, 2011 ^^ What's the point of a diesel ? You drive a lot on highways ? Link to comment Share on other sites More sharing options...
Holysmoke Posted August 4, 2011 Share Posted August 4, 2011 I dont know how I feel about this' date=' considering the rise in the petrol prices, I was considering a diesel variant as the next one, but a difference of around 18 Rs vs the maintenance cost in a diesel variant, I guess it should even things out again.[/quote'] Diesel cars are atleast a lakh more expensive than the petrol variant. The general rule of thumb is to go for the diesel if you are gonna clock more than 10k km a year Link to comment Share on other sites More sharing options...
Holysmoke Posted August 4, 2011 Share Posted August 4, 2011 ^^ What's the point of a diesel ? You drive a lot on highways ? Turns out cheaper over the long run if you are going to use it a lot. Link to comment Share on other sites More sharing options...
Guest Gunner Posted August 4, 2011 Share Posted August 4, 2011 I have never seen anyone drive Petrol in Benelux countries, Germany etc. Link to comment Share on other sites More sharing options...
Shane Posted August 4, 2011 Share Posted August 4, 2011 Actually lately I have been driving a lot out of Bombay, I drive a 2005 H5 Toyota Corolla, but usually take my uncle's 03 Skoda Rider, on site visits outside Bombay. Holy the difference in a full tank of diesel vs petrol comes nearly around Rs 1400. Was seriously thinking about the Altis Diesel around winter this year, but may be would have to consider my options. The Rider has done around 1,75,000 and has broken down twice, the Toyota around 65000 and has been rock solid. Link to comment Share on other sites More sharing options...
ganeshran Posted August 4, 2011 Share Posted August 4, 2011 Having differential prices would only fuel a black market unless supply is very strictly manage. That is almost impossible, given the size of our country and the propensity of people to try and beat the system Link to comment Share on other sites More sharing options...
Mariyam Posted August 4, 2011 Share Posted August 4, 2011 IIRC, they tried this out in Bihar in the late 80s. It was a major disaster and the reasons were two fold: 1) No private car in the districts neighbouring other states filled their tanks from Petrol pumps in Bihar. 2) For the districts in the interior, the truck walas hoarded lots of diesel and sold it to the diesel car walas at a rate cheaper than the official rate but more expensive than the rate for trucks. Soon it became a commodity on the black market. Finally this dual price was labeled a restrictive trade practice and the move was reversed. If this is done on an all India level, the problem in point 1 is addressed, but there is no way that the black marketing of diesel can be controlled. :(( I hope the govt. doesn't go ahead with this idea. Link to comment Share on other sites More sharing options...
kabira Posted August 4, 2011 Share Posted August 4, 2011 so that means diesel will be cheaper?? I have Fiat Punto, Love the Car, was quite fuel efficient until the price hikes. Link to comment Share on other sites More sharing options...
Stuge Posted August 4, 2011 Author Share Posted August 4, 2011 I dont know how I feel about this' date=' considering the rise in the petrol prices, I was considering a diesel variant as the next one, but a difference of around 18 Rs vs the maintenance cost in a diesel variant, I guess it should even things out again.[/quote'] Ever we were thinking of buying diesel variant .price difference is almost 1.2 lakhs between a petrol variant and a diesal variant . we do about 9,000km in city and 5000km on highway .thats a total of 14,000km . Link to comment Share on other sites More sharing options...
Stuge Posted August 4, 2011 Author Share Posted August 4, 2011 so that means diesel will be cheaper?? I have Fiat Punto, Love the Car, was quite fuel efficient until the price hikes. hm diesel will get costlier for car if this move is implemented. Link to comment Share on other sites More sharing options...
kabira Posted August 4, 2011 Share Posted August 4, 2011 ^well I would suggest, buy a petrol car and convert into CNG. we have Alto (bought recently used car) only 15000 kms on it. Just installed CNG, its very cost effective. 1 KM costs about 1.25 Rs. Diesel could cost you 3 Rs per km...petrom 4 to 5 Rs per km. Link to comment Share on other sites More sharing options...
kabira Posted August 4, 2011 Share Posted August 4, 2011 hm diesel will get costlier for car if this move is implemented. then whats the point of doing it, you are hitting common man anyways. Link to comment Share on other sites More sharing options...
Stuge Posted August 4, 2011 Author Share Posted August 4, 2011 then whats the point of doing it' date=' you are hitting common man anyways.[/quote'] hmm no .People like me who use petrol pay for the price of diesel .thats the reason diesel is cheaper than petrol.Diesel is subsidized for agriculture ,trucks etc use .It is not meant to be used for private car . Well ,the whole boot space is gone if we use CNG as an option . Link to comment Share on other sites More sharing options...
Mariyam Posted August 4, 2011 Share Posted August 4, 2011 ^well I would suggest, buy a petrol car and convert into CNG. we have Alto (bought recently used car) only 15000 kms on it. Just installed CNG, its very cost effective. 1 KM costs about 1.25 Rs. Diesel could cost you 3 Rs per km...petrom 4 to 5 Rs per km. Not a good idea in Mumbai. Very few CNG petrol pumps. One floor supervisor who works in our factory converted his Baleno to CNG. He says that its a little unsafe and he has to wait for long time in a line for a refill. And you lose that much storage space. then whats the point of doing it' date=' you are hitting common man anyways.[/quote'] Because the government doesn't want to subsidize you traveling in your private car. Why should you get a subsidy for your entertainment/personal usages? The govt idea is right, but the way people will black market diesel in India, it will never work. The smarter thing for the govt to do will be to phase out diesel cars in the long run. Only allow commercial diesel vehicle and jeeps/suv. Will help the environment too. The differential pricing will be a mess. Link to comment Share on other sites More sharing options...
Recommended Posts