[sgiitk]

@Gansan; After the VI pay commission there is a fuel allowance of Rs.3200(linked to the DA) irrespective of whether you live on camps, or off it, drive or not. The irony is only Rs.800 of this is tax exempt.

[odyssey045]

I have to shell out 30% tax on income, additional VAT + service charges for each item i buy in super markets, and more than 30% of my fuel bill again goes towards taxes! All the subsidies given to us in our taxable income are recovered this way i guess.. *sigh*

[headbanger]

The only fact which enrages me like anything is that whatever tax I pay to govt is being used in creating scams. Had this money been used in any meaningful way, I would have been not cribbing at these hikes....

[tj123]

The entire Oil subsidy is a complete mess, government first impose 50% taxes on Petrol to counter the oil subsidy burden on diesel , Kerosene & LPG. More than 50% of the subsidized Kerosene is used to adulterate diesel and petrol, this leads to higher emissions and lowers our vehicle mileage figures. This is a big mafia and lot of people are making good money.

So removing /reducing the subsidy is the only answer to curb this menace, but the stakes are too high for any political to take this drastic step and invite public wrath.

I am sure by freeing diesel and Kerosene to market forces will make a huge difference in the petroleum sector. The taxes on fuel can be reduced easily as there is no subsidy burden hence all sectors of the public will be benefited.

[srishiva]

I think it will be very difficult for the govt to remove the taxes on fuels. They have got used to it. How else can you take care of the deficit that it would create? Anybody has any details on how much is raised through taxes on fuels?

[vina]

Originally Posted by amit1234singla

Sorry, but I disagree. Between petrol and diesel cars, fixed part is the investment (extra payment to buy a diesel) and variable part is the running cost. The extra you pay to buy a diesel, more or less gets recovered when you go out to sell it.

Originally Posted by DieselFan

Wrong information. The break even between petrol and diesel cars is 12 months now if a person runs at least 1000 kms a month and 2 years if he runs the car 500 kms a month.

Originally Posted by selfdrive

Dieselfan, IMHO it is a little more than 1 year as you also need to consider the inflated version of the 1 L. Even a simple FD for a year fetches around 9%
Moreover, maintenance/ costs of spares may be different too, so it cannot be a simple linear calculation

@amit, @diselfan - you need to calculate again in the correct context.

First, the prices of diesel used are unrealistic - there is no reason to believe that govt. wont increase the prices soon enough, in fact if someone made the buying decision just a few months ago, that'll also change the economics.


On top of that, most guys thinking about diesel vs. petrol are not going out to buy C-segment sedans. If you are buying a car that costs over Rs. 12lacs on the road, and talking about saving of Rs. 50000 per year, even as I guy who has the reputation of being a miser in my friend circle (and with my wife and sister) I don't know what to say.

Hatchbacks (and may be B-segment) are more relevant for comparison. And there the difference in mileage is between 14km/ltr (petrol) and 18km/ltr to 20km/ltr (diesel). If you compute again, that suddenly reduces the fuel costs as well as saving shown - saving will be more like Rs. 2000/month (even with today's prices).

I'm using Ford Figo numbers here, but I believe Swift numbers reported on Team BHP tell a similar story.



At 1000km/year it is merely break even once you take additional interest paid on the car loan (I gather present rate is in the neighbourhood of 14%) and even marginally higher service and insurance costs.

500km/year for two years is absolutely lossy on a diesel whichever way you calculate.

Add to this the fact that petrol buyers actually have a wider choice of cars (and on Maruti - choice of safety options on Ritz) including, for example, the option of buying a WagonR if they almost never have more than 4 people travelling and rarely travel out of town (i.e. a vast majority of car buyers)

I did a lot of analysis and bought a diesel - I'm happy with my decision but for new car buyers I ask them to be cautious.

[vebmetal]

Originally Posted by headbanger

The only fact which enrages me like anything is that whatever tax I pay to govt is being used in creating scams. Had this money been used in any meaningful way, I would have been not cribbing at these hikes....

While I totally agree with your sentiment, I have seen the other side too. Americans have excellent civic infrastructure - they get water that is drinking level quality in their pipes - in fact they get 24x7 water and electricity. Their roads are quite decent, the telecommunications network is adequate, the average person can deal with a civic authority without giving bribes, they have climate control in most houses, a very low level of dust generally, good municipal organizations that keep most of the country quite neat and tidy etc. etc. etc. My point is that despite all this, a huge chunk of the population still resonates the same sentiment that you expressed - why should I pay taxes? What do I get out of it? So while by our standards their tax money has been used in a meaningful way, still they crib about taxes (just see the nonsense that goes about around the time of U.S. elections).

The thing is that in India, we are all guilty of the fact that we focus only on the negatives and not on the positives. While really all too little of our tax money is used efficiently, the fact is that it is used for the betterment to some extent at least. The other way I would put it is that yes, we are 5% of where we should be as a nation. Things like water, food, electricity, healthcare, fuel should not even be a cause of concern for any citizen. Had we as a country (and I wouldn't single out only politicians for our state - after all it takes two to be corrupt - our businessmen and so called 'civil society' is also hand in glove) been sincere in our efforts, we would have a shining example of a nation and society. So yes we are only 5% of where we should and could have been. But by not paying taxes, do we take this percentage any further?

Anyway, coming back to the topic, I reiterate my opinion that there is a silver lining in the price rise. I am not a richie rich that this doesn't affect me (just this week I noticed I have been using the car 60% less), but I think it's important to recognize as others have pointed out that subsidies are only a short term bandage on a long term axe wound. We need to start innovating and come up with next gen fuels, otherwise we stand the risk of sinking into the trap of being too dependent on fossil fuels.

And I am all too keen on Tesla coming to India (I wish!!)

[Gooney]

Totally

Originally Posted by vebmetal

Americans have excellent civic infrastructure...

The thing is that in India, we are all guilty of the fact that we focus only on the negatives

A very well laid out arguement! To add on, here are my two cents:

The Scandanavian countries are taxed the most, and I believe their civic facilities are by far the best in the world. They do not crib like the Americans, do they?

Also, comparing North America and India is not an apple to apple comparison. The demographics, the geography, the climate, the history, in fact, everything comparable - is different. At the cost of being racist (?) I will say that Americans crib because of the innate human tendency of being dissatisfied (never enough), we crib because we do lack basic amenities.

However, like you pointed out, to solve our problems, we cannot / should not look westward for solutions, rather look within. Our problems, our solutions, our perspective.

Cheers!

[vishnurp99]

I have a question for all of you. Forgive me if the answer is obivious.

IF the diesel prices are deregulated according to the ET snapshot the diesel price will only rise by around 9 Rs correct. So diesel prices will become 46 odd in delhi while petrol would still remain at 63.

So the petrol diesel price differential will still stay high right? Please confirm my understanding of this ET article scan.

The other question is what is 31? is it the international price for one litre of diesel?

[Gooney]

Originally Posted by vishnurp99

I have a question for all of you. Forgive me if the answer is obivious.

So the petrol diesel price differential will still stay high right? Please confirm my understanding of this ET article scan.

The other question is what is 31? is it the international price for one litre of diesel?

Given the macroeconomic policies of our government, the diesel-petrol price differential will remain wide, because diesel runs the economy (think commercial vehicles ferrying essential commodities, railways, infrastructure equipment)

Rs 31, is the price for buying a liter of crude oil (average of Dubai and Brent crude, in our case), which is then refined by the refineries.

[Tats07]

[quote=Sowmya;2357015]Taxes on Petrol/Diesel.quote]

Can anyone tell me what is the reason for the Petrol price to be highest in Bangalore - Rs. 71+, whereas, in metros like Delhi and Mumbai they are cheaper? Delhi seems to be the cheapest in terms of price, just because it is the capital city?

[Gooney]

Originally Posted by Tats07

Taxes on Petrol/Diesel.quote]

Can anyone tell me what is the reason for the Petrol price to be highest in Bangalore - Rs. 71+, whereas, in metros like Delhi and Mumbai they are cheaper? Delhi seems to be the cheapest in terms of price, just because it is the capital city?

It is because of the State Tax component, which varies among different states and is based on the whims of the state goevrnment.

[Tats07]

And the state considers it is proper to impose the max tax in Bangalore? Because there's a stupid perception that this is where people earn the most? Huh!

By far, this is the most indisciplined city in terms of traffic!

[Gooney]

Originally Posted by Tats07

And the state considers it is proper to impose the max tax in Bangalore? Because there's a stupid perception that this is where people earn the most? Huh!

By far, this is the most indisciplined city in terms of traffic!

You hit the nail exactly on its head! More than price hikes, I think it is the disparity among state government taxations, and the proportion of taxes involved, which is the biggest grouse of the common man...us

[Sowmya]

Originally Posted by Gooney

You hit the nail exactly on its head! More than price hikes, I think it is the disparity among state government taxations, and the proportion of taxes involved, which is the biggest grouse of the common man...us

As you can see Kerala Govt are planning to reduce the state Tax to almost one rs. This will make the price cheaper by few penny.
In Bangalore we paid max RTO tax as well as Fuel tax, but the roads remains same, or patching up with debris/stone dust Greedy GOVT.