Simply could NOT miss the irony of this.

[Guest dada_rocks]

Can you guys keep Modi off this thread please? We are discussing something totally unrelated. Yesterday, oil was at a freaking $143/barrel. That is insane. What is more insane is, an average consumer in the West, who's per capita income is excess of $45,000/year pays exactly the same amount for a litre of petrol as the person in Asia, whose PCI is $2500/year. You gotto have different pricing structures for different regions, surely. When every other commodity( like vegetables, meat) is priced higher in the West, compared to the say Asia, how is it remotely possible for gas alone to cost the same everywhere? Bear in mind, oil is still heavily subsidized in the third world. But for them subsidies, things would have been even worse. I dont understand why this issue hasnt gained worldwide prominence yet. High fuel prices are crippling the lives of hundreds of millions of people, its slowing down the GDP growth rate of many developing countries, thus indirectly affecting the number of people who come out of poverty each year.

This is a break up considering crude oil at 130 $ per barrel.. :- 1 oil barrel =36 gallon 1. Basic Price = Rs. 21.93 2. Excise duty = 14.35 3. Education Tax = 0.43 4. Dealer commission = 1.05 5. VAT = 5.5 6. Crude Oil Custom duty = 1.1 7. Petrol Custom = 1.54 8. Transportation Charge = 6.00 Total price = Rs 51.90 (may vary state to state) So both India and USA get oil at same price. India incurs less transportation cost since it's relatively closer to arab states. Since we pay less to workers involved in refining industry well just becayse they work in Indiaso we incur less cost even here. Infrastructure cost involved in refineries can be asumed to be same. So how come end up paying same and still govt claiming that ONGC/IOC are running in loss whereas in USA oil companies with exactly same kind of pricing are reporting grand scale profit. Only thing that can explain this discrepancy is the price break-up under 2-8. It seems logical to say indian govt is charging too much overheads and then crying that they are subsidising oil .. It's people who are subsidising and in addition they are also beimg made to feel guilty by constant badgering from govt sources saying how they are getting subsidized oil. How about these politicians look inwards and cut their govt's running cost.. For starter who needs those 2 acres vast sprawling bunglows for ministers . Who needs president house whose energey bill alone runs in 40 crores... If after all the possible cut in expenditure cost, still govt can't balance the book then for heaven's sake don't play this subsidy card at least for petrol which is being used by middle class. This si counter-productive because people don't change their consumption pattern despite global oil price sky-rocketing. people advocate that oil subsidiy helps keep growth rate sustained. Yes it enables us to keep reporting the higher growth-rate which is a temporary fix. Mind you kerosene oil price has not been hiked so the poor can still be shielded and has been shielded from all this. If only then can fix the foodgrains supply and distribution in PDS....

[Brainfade]

Can you guys keep Modi off this thread please? We are discussing something totally unrelated. Yesterday, oil was at a freaking $143/barrel. That is insane. What is more insane is, an average consumer in the West, who's per capita income is excess of $45,000/year pays exactly the same amount for a litre of petrol as the person in Asia, whose PCI is $2500/year. You gotto have different pricing structures for different regions, surely. When every other commodity( like vegetables, meat) is priced higher in the West, compared to the say Asia, how is it remotely possible for gas alone to cost the same everywhere? Bear in mind, oil is still heavily subsidized in the third world. But for them subsidies, things would have been even worse. I dont understand why this issue hasnt gained worldwide prominence yet. High fuel prices are crippling the lives of hundreds of millions of people, its slowing down the GDP growth rate of many developing countries, thus indirectly affecting the number of people who come out of poverty each year.

You get what you negotiate. OPEC holds all the oil cards, and poorer nations cannot negotiate from a position of strength.

[Brainfade]

This is a break up considering crude oil at 130 $ per barrel.. :- 1 oil barrel =36 gallon So both India and USA get oil at same price.

DR, are you sure that India and USA get crude at the same price from OPEC? I was under the impression that the US companies have negotiated with the producers to get crude at better prices.

[Guest dada_rocks]

DR' date=' are you sure that India and USA get crude at the same price from OPEC? I was under the impression that the US companies have negotiated with the producers to get crude at better prices.[/quote'] I am going by the govt spokesperson quotation about the crude oil price. Have always found them in agreement with whatever global crude-oil price was. But you may have a point there, since USA is bigger consumer then it's pretty much possible they get little better price than the rest. If that's the case then my calculation has a lacunae otherwise I don't see why indian govt despite charging same price (heck evenwhen in USA price was well below $ a litre they were charging 50 Rs) as in USA despite less cost incurred in refining can do a rudali routine on TV crying how they are subsidizing oil.

[Ram]

This is a break up considering crude oil at 130 $ per barrel.. :- 1 oil barrel =36 gallon 1. Basic Price = Rs. 21.93 2. Excise duty = 14.35 3. Education Tax = 0.43 4. Dealer commission = 1.05 5. VAT = 5.5 6. Crude Oil Custom duty = 1.1 7. Petrol Custom = 1.54 8. Transportation Charge = 6.00 Total price = Rs 51.90 (may vary state to state)

Assuming one barrel = 40 gallons = 160 litres of petrol that can be got from that. i.e, 160 litres of petrol for ( $130*42) rupess. 160 L = 5460 rupees. Therefore, the basic price of 1 litre of petrol = 34 ruppes. So, I cant figure out where you got the 21 rupess figure from. Besides, we have made a massive assumption that 160 litres of crude oil gives 160 litres of petrol on refinement, which isnt the case, coz in the distillation process, a lot of by-products like Kerosene are removed. My guess is, 100 litres of crude oil, on refinement, probably gives only 80 litres of petrol at the max. That means the cost of one litre of petrol is even higher, so the govt is obviously subsidizing it in large way. As an educated guess, we could say that our govt pays anywhere between 5-8 rupees, for every litre of petrol we buy. That could explain the losses of the oil companies.

[Guest dada_rocks]

I might have used different number for barrel and gallon different exchange rate and gallon .. all the points u mentioned stand true for refineries world over .... for instance even in usa same equation of recovered volume of petrol from a given volume of crude oil stands...... .. .point being whatever way you look at it.. if original crude oil price is same for both india and usa.. transportation cost refinign cost is less for india in terms of rs ( assuming same technology for refinement and same efficiency of workers) then how on earth with exactly the same final price in domestic market one country's refineries are reporting windfall profit and other country's refineries are crying how they are runnig in red....... . just doesn't make sense to me..

[fineleg]

MM, "Socialist democracy" - please elaborate a bit, what exactly do you want in India? (or other such country) As long as people are not commiting crimes to earn money, and it is earnt by their work and brains and supply/demand forces of the profession they practice, then we cannot force them to "not make so much money".

[Desi Cartman]

As for the price of petrol, I think We need better public transport in India ... I went to India last year and could see how people preferred to use Metro than to use their cars. Its not just about India, all countries need to have better public transport and also have subsidies on hybrid cars. Oil is just another commodity and the price is determined by supply/demand. The price has been going up since there is massive increase in demand from China and India. Also there is the "middle -man" who is playing in the future's market and thus its become more of a share market.

[Ram]

MM, "Socialist democracy" - please elaborate a bit, what exactly do you want in India? (or other such country) As long as people are not commiting crimes to earn money, and it is earnt by their work and brains and supply/demand forces of the profession they practice, then we cannot force them to "not make so much money".

Sorry, I cant agree with the concept that its ok for a few to be super-rich, while we wait and watch the majority wallow in abject poverty. Like how its the responsibility of the govt to make sure every citizen has same law and order, its also its duty to make the welfare of all is taken care of. Of course, the main problem in a country like India is, even if we tax the rich more so get revenue to spend on social welfare programmes, most of that money will be gobbled up by corrupt middle-men anyway.

[fineleg]

MM, You cannot let the Govt be a Robin Hood. You can have tiered taxes, but it cannot be that you 60% tax for the rich. That wont cut it. Being rich is not being a "bad person". As long as the rich was earned legally and without resorting to unlawful means, then that is not something the Govt should "penalize" - reasonable tiered taxes is fine.

[Brainfade]

MM, You cannot let the Govt be a Robin Hood. You can have tiered taxes, but it cannot be that you 60% tax for the rich. That wont cut it. Being rich is not being a "bad person". As long as the rich was earned legally and without resorting to unlawful means, then that is not something the Govt should "penalize" - reasonable tiered taxes is fine.

The government should encourage self-reliance, not dole-outs. And that means not bailing out Bear-Stearns and other banks when they flushed themselves into losses by making risky investments.

[fineleg]

^^ Cricaddict, I agree that govt should not do dole-outs. That applies to Bear Stearns, that also applies to people who foolishly went way over the head and bought homes that were not affordable to them. Dont bail-out foolishness and lack of self discipline.

[Brainfade]

^^ Cricaddict, I agree that govt should not do dole-outs. That applies to Bear Stearns, that also applies to people who foolishly went way over the head and bought homes that were not affordable to them. Dont bail-out foolishness and lack of self discipline.

Nail meet head. Which is why it helps to have fiscally conservative leaders. Neither McCain nor Obama are remotely interested in fiscal conservatism.

[Guest dada_rocks]

There is delicate balance between increasing tax percentage and totoal tax collection.. start taxing more percentage people will invent methods to dupe govt.. Indira Gandhi hadincreased it to the level of 70% once and govt coffers were not awash with money..... ridiculous level of taxing and spending it on non-perfomring member of society is a backdoor communism ,long as it is done in moderation fine.......... but if you go over-board you might as well drop the facade of capitalism and invoke communism

[Guest dada_rocks]

As for the price of petrol, I think We need better public transport in India ... I went to India last year and could see how people preferred to use Metro than to use their cars. Its not just about India, all countries need to have better public transport and also have subsidies on hybrid cars. Oil is just another commodity and the price is determined by supply/demand. The price has been going up since there is massive increase in demand from China and India. Also there is the "middle -man" who is playing in the future's market and thus its become more of a share market.

That's fine but can you explain why the similar price in USA gives oil companies windfall profit whereas in India public sector have been crying about how they are running in red..... Same price exactly in both countries u will get.... One country has cheaper labour and still that country cries about running in loss.