[RSR]

Originally Posted by adimicra

As per yesterday's rate, both Shell and Essar is priced higher than Govt OMCs.
Sorry to say but that's inexplicable.

I think we have a habit of bashing anything related to the Indian govt. while defending private players like Shell. Unfortunate!

I don't know about Essar, but Shell (in India) is purely a marketing company. They don't have any kind of upstream business, nor do they do any refining themselves.

Since they procure their fuels entirely from PSU refineries through bulk deals, and then transport and market them through separate channels, their prices will always be higher. Their prices may be very close to the PSU OMC rates in some places like Karnataka (because of proximity to the refinery) or even less by a few paise. In many other places, their prices are higher by anywhere between 1 to 3 rupees per litre of unleaded petrol.

From what I've seen, people go to Shell pumps mainly because of 2 reasons:

1) Assured quality and quantity. Unlike PSU pumps, where the notorious oil mafia with its thugs and goons indulge in a huge adulteration racket (with kerosene) wherever they can, Shell has more stringent processes to keep these in check. However, this is not unique to Shell, as some of the better PSU pumps (mostly COCO ones) also have stringent processes to prevent adulteration.

Shell also gives its retailers a better margin on every litre of fuel sold. So they have less reason to indulge in malpractices themselves (adulteration and/or tampering with the meters).

People often claim Shell fuels return a better FE (especially with two-wheelers). While this may be true, it's not necessarily because of the fuel itself, but more likely due to the fact that every litre sold at Shell is purer and more accurately metered.

2) Neat facilities and good service. Ever tried using the restroom of a typical PSU pump? Shell ensures that customer facilities are always maintained to decent standards. Besides this, there is the service offered by well trained and better paid pump attendants. You won't find them to be rude, crude or trying to rip off unsuspecting customers with cheap little tricks like some of the attendants at a typical PSU pump.

When they completely procure their fuels from the PSU refineries and market them with better quality & quantity standards and offer much better customer service & facilities, then how can one expect their rates to be less than those of the PSU pumps?

(The above holds good only for Shell and not for Reliance, Essar etc.)

I'm sorry to say this, but this has got nothing to do with bashing the public sector and praising the private sector. Let's face it - Shell thrives on free market principles, while the PSU OMCs are typical outdated relics of the nasty commie-inspired license raj crap that the country was cursed with for decades, due to the (characteristically Third World) economic policy of trying to imitate the murderous totalitarian Second World commie failures (like the defunct Soviet empire & its underlings) and bashing the free market economic ideology of the civilised First World.

[supremeBaleno]

@RSR, very nicely written response & backed with the proper reasoning behind Shell pricing. Have always wanted to try Shell atleast once, but never came around to it due to the typical mindset of not wanting to pay a few bucks more per litre for the same thing (possibly not the same thing in terms of quantity/quality, as you pointed out).

P.S.: The commie-bashing at the end could have been avoided & was the only sore thing that marred an otherwise splendid post. Neither are they to blame for all the world's ills nor is capitalism the panacea for the world's problems and neither is the US of A an angel.

[MaxTorque]

@RSR well said. I always prefer to fill fuel from Shell because of the reasons you have already mentioned. I spend only Rs.2000 odd rupees on fuel (thanks to my company transport) so I am spending Rs.50-60 extra while filling from Shell. It's a complete peace of mind, otherwise we need to be very vigiliant to avoid any foul play by attendants in the PSU outlets.

In my opinion the COCO outlets are also at par with Shell pumps interms of service and cleanliness. Unfortunately there is no COCO outlets in our location.

[sgiitk]

The OMC's are making Rs.1.70 per litre profit on Diesel. GoI is planning to have a two stage reduction of Diesel prices. It will most pprobably be a cabinet decision to deregulate, and whether the EC Code of conduct comes in the way or not may decide the timing.

[lurker]

Originally Posted by sgiitk

and whether the EC Code of conduct comes in the way or not may decide the timing.

Election Commission, honourable, may never give permission because they know that it is such an earth shattering, mindblowing event (reducing prices ie) that several OMC heads may come unhinged because of such a shocking event.

Reduce prices (that too of diesel) .. God what has the world come to, this is never the India we knew. Our Chairman has still not recovered from the shock of possible price reduction, if at all things come to such a pass ie. Directive has come from highest quarters to delay, delve, postpone such a situation by giving any number of vague excuses such as EC, MC/BC, PM, Cabinet Comittee etc - OMC Spokesman.

[deetjohn]

Originally Posted by sgiitk

The OMC's are making Rs.1.70 per litre profit on Diesel.

It is 1.90 a litre now. Source

The profit on sale of diesel swelled to Rs.1.90 a litre as the Oil Ministry awaits return of Prime Minister Narendra Modi to cut rates. With international oil prices continuing to slide, the over-recovery or profit on diesel sales, which was 35 paise in the second-half of September, climbed to Rs.1.90 a litre, an official statement said here.

Over-recovery or profit should have in natural course translated into a price reduction to bring retail selling price on a par with cost. But the Oil Ministry decided to wait and watch last month.

Now, with the profit rising further, it wants to reduce the rates and pass on the benefit to consumers but is unsure of its mandate.

But under-recoveries continue on kerosene and LPG.

[i10]

I wonder what the profit is on petrol. If diesel is around the 2 rupee mark, shouldn't petrol be much higher?

EDIT: Going by Petrol price buildup breakup on the IOC website, https://iocl.com/Products/PriceBuild...ldup_of_MS.pdf, is the profit per liter of petrol at Rs. 2.64 (45.10 - 42.46)?

[sgiitk]

Originally Posted by sgiitk

The OMC's are making Rs.1.70 per litre profit on Diesel.

Originally Posted by deetjohn

It is 1.90 a litre now. Source

Yes, I was wrong, it is 1.90. What may happen is deregulation and a 0.90 announcement from the OMCs (it may avoid the EC) and then a further Re.1 10 days later (nearer the polls), since now the GoI will have (officially) no say.

[hellmet]

Originally Posted by RSR

You won't find them to be rude, crude or trying to rip off unsuspecting customers with cheap little tricks like some of the attendants at a typical PSU pump.

I disagree! I was once (rudely) asked to leave a Shell premise because I wouldn't turn around my motorcycle for fueling. It seems they'll only fuel if I align my vehicle towards a particular direction. This was early in the morning with NO ONE around getting a fill except me (before the days of deregulation - nobody back then bothered to fill at Shell), and they STILL wanted me to turn around the vehicle. I refused to do so, was asked to piss off, and I never returned to any Shell ever again.

I had been a loyal customer for my car and bike even paying the extra Rs.2-4, but this was enough to make me go back to the so-called "rude" PSU pump staff. The PSU pumps, I notice, are faster and have a no-nonsense attitude, whereas Shell staff seem to be "trained" and will therefore stick to stupid rules at the cost of customers.

P.S: This was Shell near Gachibowli.

[SunnyBoi]

Originally Posted by hellmet

I disagree! I was once (rudely) asked to leave a Shell premise because I wouldn't turn around my motorcycle for fueling. It seems they'll only fuel if I align my vehicle towards a particular direction. This was early in the morning with NO ONE around getting a fill except me (before the days of deregulation - nobody back then bothered to fill at Shell), and they STILL wanted me to turn around the vehicle. I refused to do so, was asked to piss off, and I never returned to any Shell ever again.

I had been a loyal customer for my car and bike even paying the extra Rs.2-4, but this was enough to make me go back to the so-called "rude" PSU pump staff. The PSU pumps, I notice, are faster and have a no-nonsense attitude, whereas Shell staff seem to be "trained" and will therefore stick to stupid rules at the cost of customers.

P.S: This was Shell near Gachibowli.

Shell has decided to temporarily close its four retail outlets in Hyderabad from 30th September, 2014, till further notice.

We continue to serve our esteemed customers with the highest levels of service at other sites in the country. Shell remains committed to the fuels retailing business in India and continues to explore growth prospects. We urge our valued customers’ understanding of this difficult situation and hope that they will continue to support us.

We regret the inconvenience caused to our loyal customers.

Source : http://www.shell.com/ind/products-se...ing-board.html

Coincidence?

[sgiitk]

Brent dropped to $91.73 and is around $92.05 now. This is due to Saudi price cuts.

[suresh_gs]

Petrol price in BP near my home is selling petrol at 73.91/ l

[andydude]

Oil hits new low below $91 on weak demand forecasts - The Economic Times http://t.co/QmWUJ7VPy7

[suresh_gs]

Originally Posted by andydude

Oil hits new low below $91 on weak demand forecasts - The Economic Times http://t.co/QmWUJ7VPy7

I guess this will translate into more cuts in petrol prices.

[saket77]

Read in local newspaper in the morning that diesel may be heading for a Rs. 2.50 price cut and petrol may be reduced by a rupee on 15th October. No source to quote as it is local newspaper.