mayurpathak
mayurpathak
Branch Unspecified
22 Dec 2008

The great Petrol Price divide.

I recently traveled to Delhi for a personal trip. I was roaming around with my brother in law in the New Delhi city, enjoying the heat from inside of the air conditioned car. So we pulled over a fuel filling station. A liter of petrol in New Delhi will cost you around 45 INR (roughly a little more than a dollar, at current conversion rate). So we roamed and we had to go to the filling station again, this time in Noida. I was amazed looking at the petrol prices in the country national capital reserve! The price was well over 50 INR. So for every 10 liters I purchased, I could get a liter free if I did the same purchase in New Delhi?

Well well well... it was really surprising how petrol prices could change in space of mere 100 meters. So much for the taxation difference in states. (Noida is in Uttar Pradesh).This put a big question in my mind. Who governs the prices across the globe? Is it the oil moguls? Is it the suppliers? As usual I have turned to CE for help. Can I have an insight from the wise and knowledgeable CEans?

We have a global audience here. I hope we could be able to compare global prices, the differences and the reasons for fluctuation. May we we can come up with some thing to revive the lost cause of controlling the fuel prices.
MaRo

MaRo

Branch Unspecified
10 years ago
In Egypt, fuel getting high according to raising of people salary, as by 1st May all salaries raised 30% next day fuel price raised from 1.30 (25 cents) to 1.85 LE (35 cents) for litre no obvious reason, but I have to say that it's much better here than India for prices of fuel
Ashraf HZ

Ashraf HZ

Communications
10 years ago
Unleaded petrol in Malaysia is around $0.60 per liter, thanks to government subsidies. However, with the price of oil at high levels, I doubt the government can sustain it.. the net petrol price will increase for sure.

I'm guessing its speculators who are pushing up the global price to crazy heights.
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Prices of petrol rising due to salary rise? Well thats very strange. Whay is that so MaRo? But alas, they are not as bad as India. We purchase one of the most costliest petrol here in India.

Good quality petrol in Mumbai is as high ar 54 INR. Could you believe it? Almost double the price of what Ash quoted for Malaysia. Wish I could be there ;-) Is there a way we can curb the rise? I mean, as a common man, can I do some thing?

What is this Ayan doing by the way! Ayan I suggest you write some thing on the forum that we could understand.
MaRo

MaRo

Branch Unspecified
10 years ago
Yes, so strange but I realized that because last year this also happened, we have this conference that president talk to people and stuff, last year he raised salaries and fuel raised on the same day from 1 LE (0.15 cents) to 1.30 LE (25 cents) raised (30 piastres), I think when busniess owners find the salary get raised they raise their prices as well we feel it in fuel the most because it's one of the most used single goods.

I means in food, cloth..etc you can get the cheaper for fuel it's a single type no chocies.
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Couldn't agree any lesser. And I think one more reason is that because we can not do with out petrol, it gives all the more reason for these warlords to up the price.

As the overall prices inflate, so does petrol. But then I have always failed to understand one point. I know that inflation is a function of demand and supply. Still, why is it so that some countries show phenomenal rise in the prices where as some of them and moderate. May be the purchase power parity and growth have a say on this. And if thats the case, how come even food grains are very costly in India compared to other economically equal states?
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Another point. Few weeks or may be months back, I received an email urging not to purchase petrol on 22nd September. It also gave a break up of how much the companies controlling oil supply will suffer with this "one day ban" of petrol.

I don't know, was it true or was it a hoax? Will such an initiative peg the march of these oil moguls? Will it prevent another Iraq or gulf war?
raj87verma88

raj87verma88

Branch Unspecified
10 years ago
Ayan
haskjdhkasdhakjshdkashdkahsdasdasd
Ayan
sdalskjdlajsdlakjslajlskdjalskda
Ayan
To Test How Forum Works and Get Knowledge of its Flow this is written
Nobody is asking you to post such gibberish in this thread. If you do not have something good to add to the discussion, you might as well keep out of this. If you have something good to say then you will be welcome and people will respect you as a value adder to the forum. But if your idea is to just increase your number of posts by such stupid spam, then I don't know what to say about you. 😡
Ashraf HZ

Ashraf HZ

Communications
10 years ago
Ayan
haskjdhkasdhakjshdkashdkahsdasdasd
Hello Ayan.. as Patty said, this is not the place to be posting "spam". If you really want to practice using the posting features, please go here: CE - Newbie Training Center - CrazyEngineers Forum

Back on topic. Mayurpathak, can you enlighten us with the break up of how companies controlling oil will suffer? I'm pretty curious 😛

Regarding the inflation.. besides the supply and demand function you've mentioned, one of the reasons why different countries show different rises in prices is government intervention (eg subsidies, policies, trade barriers etc). The government can decide whether basic commodities should be subsidized for the benefit of the common citizen, like rice and petrol. They can only do that if they have a budget surplus (or at least minimal deficit) or very large foreign reserves.

If you subsidize a certain commodity, complementary goods related to it will not suffer inflation. The opposite is true too.. if petrol prices are rising without government intervention, costs of transporting food will rise too, and so on.

They might also want to tax imports from other countries which sell cheaper goods than your country so that the local industries is protected.

Thus, priorities and budgets can vary country to country. The priorities can change depending on the state the economy is in too.. whether they are still developing, etc. Quite a number of factors involved.

Maro, hows the food prices there now? I saw on the news a while back about the crisis with the bread supply. Still the same situation?
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
ash
Mayurpathak, can you enlighten us with the break up of how companies controlling oil will suffer? I'm pretty curious 😛
I don't know really. I read it in the mail about the number of companies (there are only about 10-12 in India) supplying oil and their average earnings per day. So if we didn't buy petrol for a day, how much loss would they suffer. But thats not really true. Even if we delay the purchase by a day or so, the amount of fuel our vehicle will consume would more or less remain the same.

ash
They might also want to tax imports from other countries which sell cheaper goods than your country so that the local industries is protected.
Why would a government want to do that when the fuel suppliers are only a handful? Moreover in India, foreign players are not allowed to sell directly. We have about 4 public and 3 private players here. Thats it!

I agree with your argument on subsidies on the primary goods (if we consider motor fuel as primary, in India its not). For example, in India, the consumption of LPG and kerosene is cheap due to marginal subsidies on it. However its not the case with Petrol or Diesel.

I believe if food is subsidized, so should be fuel. Otherwise we will never be better off.
Ashraf HZ

Ashraf HZ

Communications
10 years ago
mayurpathak
Why would a government want to do that when the fuel suppliers are only a handful? Moreover in India, foreign players are not allowed to sell directly. We have about 4 public and 3 private players here. Thats it!
Of course, it might not apply with fuel 😛 It applies very well with agriculture (eg food grains from your example) and any infant local industries, to protect from strong external competitors from wiping them out unfairly (thus, affecting the livelihood of the local people).

I doubt that applies to fuel, since any company dealing with the extraction and refinement of fuel would have to be big (and rich) anyway. I suppose its safe to say all of them are some sort of globalized MNC, so trade barriers don't really apply.

But of course, anyone who can sell fuel can be considered a fuel supplier. Eg, you can syhpon off fuel in a tanker from a neighbouring country that sells fuel cheaply, and sell it in your country. Thats why governments frowns on smuggling. With the dozen of fuel suppliers in India, supplying fuel might be sort of a competition. In other countries, its just a monopoly, haha.

I believe if food is subsidized, so should be fuel. Otherwise we will never be better off.
Yep.. of course, the weightage of the subsidies between them might vary according to economic conditions. If a country has limited farming land, subsidies for for food would have to be given a higher priority than fuel. In India, I suppose its different. Perhaps different states within India have different priorities too? Its all about balancing them yea?
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Hmmm! Thats a good answer Ash. Are you a politician or are you a television presenter, eh?

😀 Different states do have different priorities. For example, my state, Maharashtra has been more focused of industrial development and attracting foreign investment. Where as states like Punjab, Haryana have given more importance to agriculture and Kerela and Goa to tourism. Depends on whats the core competency of the state.

Except for Reliance refineries and GAIL, no body in India does exploration. There are private players such as British Gas, British Petroleum or Schlumberger. But no body owns anything. Everyone buys from the gulf and sells it here. Moreover government claims that the exploration activities are already subsidized. They blame the rise of the crude oil prices.

My question still remains unanswered. Is there a way to curb the price rise of the crude oil?
Ashraf HZ

Ashraf HZ

Communications
10 years ago
*gasp* I hate politicians! 😛

I doubt theres nothing we end users can do, except seek efficient use of crude oil, or find alternatives to decrease the dependence on petrol.
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
😁 Don't worry. All politicians are not as bad.

ash
I doubt theres nothing we end users can do, except seek efficient use of crude oil, or find alternatives to decrease the dependence on petrol.
Anyway, thats very sad to hear we can't do any thing about this. Do all CEans echo Ash's voice? I think we are crazy bunch of guys. We can do any thing.

Can some body answer me?
Ashraf HZ

Ashraf HZ

Communications
10 years ago
Well.. we COULD lock all oil speculators in the basement 😉

I believe instead of trying to control the price of petrol, we should focus on it's efficiency and renewable alternatives. The use of petrol should be ultimately restricted in the long run (for environmental purposes and limited resources, anyway).
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Alternatives like building an efficient hydrogen car or a truck that runs only on batteries.

May be we develop some thing here on CE. 😀 may be!
MaRo

MaRo

Branch Unspecified
10 years ago
I don't think it's a global increasing in fuel price, in Saudi Arabia fuel prince get down from 1 riyal to 60 halalas (1 riyal = 100 halals = 0.26 cents)
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
We have been talking about the crises in Petrol prices all this time, check this link out. Look at the headline of India's leading News Paper.

<link> E paper

Some thing needs to be done about the impending prices, really.
Van Helsing

Van Helsing

Branch Unspecified
10 years ago
Hi mates...
Well, I see the price you pay for a liter of unleaded gas... what about i I tell ya that we pay about 1.5 euro per liter? This is 2.4 US$ a liter... about 9 US$ a gallon... Isn't that funny? Yes? You find it funny?😒
I don't. 😡
This is becouse of 1.2 euro for liter is spended for taxes the rest is the price of gas. This is 30 cents of an euro per liter, in other words 0.48 US$ per liter, about 1.80 US$ per gallon... Still madness... hey? Are you still there? Cam'on revive yourself this meant to make you happy not to knock you out. :smile:
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
That is the point. Its the taxation burden that takes the prices up and not the price of the commodity itself. Which country you belong to Van Helsing?

I read an article today that the government is against giving subsidies to petrol because they think this will increase its misuse and discourage people from using the public transport. It also means lesser fuel prices would cause more consumption.

Engineers? Where is the hydrogen car? Bring it on fast!
Van Helsing

Van Helsing

Branch Unspecified
10 years ago
Sorry for double message. How can I delete this? 😒😔
Van Helsing

Van Helsing

Branch Unspecified
10 years ago
Hello, I'm living sadly in Italy, from many points of view, the worse country of Europe.

Yes, this is the excuse governments, and politicians, ambientalists most of all, takes to not to lower taxes. It is clearly the pre$$ure of the photovoltaic cell gilda and gas and fuel lobby to push them toward this. We have the most chaotic public service system ever. Less fuel costs probably unleashes petrol consume but surely it will reduce slightly tax income. It seems that economy doesn’t bother too much those politicians. If I have to go to the place where I work everyday, and if I can’t go using anything else that a car, I will use the same amount of gasoline if the cost is 10$ or if it is 20$ either. But, If I save 10$ I’ll spend that money otherwise helping out economy. This is not the concern of ambientalist, who are more worried about CO2 emission than human life on heart. I bet in a future when everything will hopefully work with no-emission-something they will find new troubles, like magnetic fields, orgonic energy pollution, magnetic pole inversion, Martian virus invasion…

Hydrogen car is not a solution. Hydrogen is make with petroleum energy or with Methane cracking. This is not a solution. Nuclear power can produce hydrogen with no pollution. But I think it is better to use battery cars recharged directly an most efficiently by electricity produced by nuclear power or by photovoltaic cells, or even by windchargers. Other forms of alternative energy like oil from algae could help some way. But hydrogen is a dangerous, troublesome, media to store energy with unfair efficiency.
Cheers
Larry
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Well, I understand your problem Van Helsing. You made my problem look smaller. I don't know much about the Hydrogen car. It just came to my mind. BUt yes, we need to find other cheap and efficient alternative for sure.

Anyway, why do you say Italy is the worst country to live in Europe?
gohm

gohm

Branch Unspecified
10 years ago
I am actually glad petroleum prices have been rising. (please, please put the rocks back down :smile😀. Prices in the US have been low for a long time to incite the gluttonous usage. High prices will force people to think about their resource usage and incourage alternative fueling which has been hindered by petroleum companies. Mass transit will grow as well as civil planning. We as a society need a good kick in the pants to motivate us to develop. Out of extreme measures/times comes innovation. Its a win for science, people and nature.
Ashraf HZ

Ashraf HZ

Communications
10 years ago
I bet in a future when everything will hopefully work with no-emission-something they will find new troubles, like magnetic fields, orgonic energy pollution, magnetic pole inversion, Martian virus invasion

Haha! I believe the main concern is with sustainability. Emissions (and other forms of pollution) are real concerns because of developments of global warming, environmental degredation, health, etc. Perhaps different industries have different motives for pursuing the goal, but the end result will be beneficial to all parties. We are trying to make the world a better place for our children to grow up in. We should probably thank the work of researchers and lobbyists in the previous decade who sought to ban CFCs. Now we have faced with the on going issue of emissions. New troubles always come about because of reckless and unplanned human development and industries.

Pursuing sustainable development that is inclusive of economic, social and environmental objectives is probably the way to go.

As with mayurpathak, I'm also quite curious on why Italy is the worse country in Europe to live in 😛


gohm
High prices will force people to think about their resource usage and incourage alternative fueling which has been hindered by petroleum companies.
Good point! I believe during the 1973 oil crisis, car manufacturers in the US had implemented fuel efficient designs.. for a while anyway.

I believe petroleum companies will soon invest heavily in renewable sources. If the limited petrol resources wont motivate them, government regulation hopefully will 😛

Btw mayur, is it possible that India's current account deficit is a big factor of rising prices there? Having a deficit will sorely reduce your ability to shield yourself from that.
Van Helsing

Van Helsing

Branch Unspecified
10 years ago
Hi mates...
I'm not so glad about this overestimating oil price. As everybody can agree, the price is due to taxes, here 9 US$ a galon is a real bummer. What are administrators doing with all that money? Waisting it as politicians are used to. What I fear most, is that all that money is not invested in research for lower pollution or higher mileage cars but it is simply waisted. Cars can't be enhanced so further. And energy can't be used with a lot more efficiency than what we are doing now. And, further, we allready do not use cars just for fun, not anymore. We are using cars becouse we need it to. At least I can go to the office just walking, it takes me two aurs a day. So I must work at least two ours less. Is this, seen in a large scale, profitble to the economy? I don't know. 😒
Over this, I think the real trouble is that world population is getting really heavy stuff. This is the real bummer. Too many people. Definitely too many.

To tell you why Italy is the worse european country is not a matter of few words. In fact, I'm living here since a long time and it took me very long to understand what was so wrong with Italians. But I can assure you England, France, Spain, Germany are better countries to settle, indeed. Believe me.
Just for a start, we have the heaviest, garbled, incomprehensible taxes a distorted mind can conceive. And nobody worries about them till somebody discovers the way to prosecute some innocent... :sshhh:
😁
Cheers
Larry
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Yes ash, one of the biggest reasons is the deficit. But there is no ruling out that the petroleum companies too are involved in this. There is a big need for promoting all the projects in the sustainable development. However the encouragement that goes towards it is all verbal. There is no substantial money flowing neither from the government nor from the petroleum companies. As gohm rightly says, cheap fuel will discourage such initiatives. But as you see, costly fuel in countries like Italy or India has not encouraged it either. And with the governments still not declaring subsidies, the situation for a common man is worsening. With the ever burgeoning population in India, the current setup of the public transport is in dire states. Although government is coming out with infrastructure development projects such as Metro trains, Skywalks and Seawalks, it still is short of funds. What better way to earn them if not from taxes?

This is hard to believe oil companies are doing this in India as most of them are state controlled. And no body can sustain a loss over 20 billion dollars.
gohm

gohm

Branch Unspecified
10 years ago
I respectfully disagree, hydrogen is one of several good answers and is the next step in terms of nearing production. Hydrogen can be made from a huge spectrum of processes, many of which are much more green then refining petroleum. Plus all it gives off is h2o. GM plans on having a model for sale in the US in a few years to target around $25,000.

Also, petroleum cars can still be made much more fuel efficient. Remember it wasn't long ago cars averaged 10-20 mpg, look where we are now.
gohm

gohm

Branch Unspecified
10 years ago
I've heard some businesses here are starting to go to 4 day work weeks to help employees save money on gas and to retain the employees.
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
Oh thats interesting. They should provide the employees free passes to the metro/tube trains or the buses instead. At best they can increase the conveyance allowance. Why reduce the productivity?:shock:
Ashraf HZ

Ashraf HZ

Communications
10 years ago
The Malaysian government just increased the price to $0.83 (from 0.60). It was a sudden announcement 😔 The reduction in the subsidy will save them up to $4.7 billion, which will be allocated to other subsidies like food. Electricity will rise too.

The plan to implement a yearly rebate scheme for everyone. This includes those driving low capacity engines, motorbikes, etc. Even fishermen get a $0.03 rebate for every kilogram of fish they catch.

I commend them for their creativity in cushioning inflation prices.. but I do wonder how they really calculate them. Are their decisions normative or positive? Do they use some sophisticated numerical and statistical software? Hmm..
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
The prices of petrol and diesel have gone up by 11% and 10% in India too. Thankfully we were marginally spared as government decided to waive off some of the import duty in crude oil and reduced the excise burden a little.

But god know whats in store next. The funny thing is, despite all this I still buy one of the costliest petrol in Mumbai. We have a stupid 28% sales tax in in. 😔
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
ash
I commend them for their creativity in cushioning inflation prices.. but I do wonder how they really calculate them. Are their decisions normative or positive? Do they use some sophisticated numerical and statistical software? Hmm..
In India they are normative. But I dont know how they calculate them😡
Ashraf HZ

Ashraf HZ

Communications
10 years ago
Hm, seems like oil prices are dipping.

But, would you expect prices at the petrol pumps to follow suit? 😉
mayurpathak

mayurpathak

Branch Unspecified
10 years ago
ash
But, would you expect prices at the petrol pumps to follow suit? 😉
Na! They are not gonna do that. They are already crying losses. Wish I could make bio fuel using organic techniques at home. 😒
varunpurohit

varunpurohit

Branch Unspecified
10 years ago
I guess most of you would have got a forward mail about Inflation and steps to curb it.... It did not talk just abt FUEL prices, but all consumer products.

Here are the points i remember....

We all know that increase in Price is directly proportional to demand.

Hence with the rise in number of cars, the demand for fuel has also increased. Dont fill your vehicles tank FULL at one shot. Each time you go to the Gas station refill it for say your 2 to 3 days requirement.

Dont buy anything extra (avoid stocking!!!).... Ex: Say there are 4 people in a family and if they can consume only 5 packets of biscuit in a month... why buy 10? (This is just an example).

These days multiplexes have started charging exhorbitant rates!!! A bag of pop-corn and coke Rs.80/- !!!! You can get the same for Rs.25 outside. Don encourage them by buying!!! We might have to go without pop-corn, but atleast we would be on the path of reforming them.

Now this reduction in demand would lead to a downward spiralling effect....

Retailers will not run short of stocks quickly -> wholesalers will get lesser orders -> the rate of production in industries will reduce..... Hence to increase demand there would be discounts, and reduction in price.
Ashraf HZ

Ashraf HZ

Communications
10 years ago
Yay, price at petrol pump in Malaysia is now RM1.80 ($0.52) per litre!

Hm, maybe the contraction in global demand has some perks after all.

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