BMW has launched what has now become their cheapest car model in the Indian market.

BMW X1 is a mini sports utility vehicle model and pricing starts at around Rs. 22 lakhs. The top end model is close to Rs. 30 lakhs.

This model is available in both petrol and diesel variants.

The petrol engine model delivers 150 BHP with a torque of 200 Nm at 3600 rpm. Fuel efficiency: 11.24 kmpl.

The diesel engine model delivers 177 BHP and torque of 350 Nm from 1750 to 3000 rpm. Fuel efficiency: 15.24 kmpl.

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http://business.techwhack.com
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Govt decontrols fuel; hikes petrol, diesel prices

NEW DELHI: In a major decision to bring petroleum products in line with market rates, the government today freed petrol from all pricing controls and hiked diesel prices by Rs 2 a litre, Oil Secretary S Sundareshan announced after the meeting of the Empowered Group of Ministers.


Petrol and diesel will cost up to Rs 3.73 per litre more, households will have to pay an additional Rs 35 per cylinder and poor man's cooking medium kerosene will be dearer by Rs 3 a litre from today, the government said here.



The decision follows a ministerial panel meeting on freeing up petrol prices and cutting subsidies on diesel, kerosene and cooking gas, to help rein in the fiscal deficit, which is projected at 5.5 percent of the gross domestic product in 2010/11 and free up revenues for other programmes.



The move will help boost profits of state-run oil firms that have been losing revenue from government-set lower prices.

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Petrol prices in india--

In two months period Government of India has cut again the petrol prices and the present price is Rs 44.66ps. per litre in Chennai.

The previous price in Chennai.was Rs 49.66. Thanks to the Government of India for having considered a long time request from various section of people of India.

Again the prices of diesel and cooking gas have also been cut and the expectations of the general public and housewives have been fully met.

Government has slashed the price of petrol by Rs. 5 per litre, diesel by Rs. 2 a litre and LPG by Rs. 25 per 14.2 kg cylinder from 28th January 2009, Wednesday midnight.

Fuel Price in Metro Cities (Price in Litres)
PETROL Place Old price New Price Delhi 45.62 40.62 Kolkata 47.16 44.05 Mumbai 49.80 44.55 Chennai 49.66 44.24

DIESEL Place Old price in Rs/L New Price in Rs/L Delhi 32.86 30.86
Kolkata 33.92 33.21
Mumbai 36.69 34.45
Chennai 34.98 32.82

LPG Place Old price in Rs/L New Price in Rs/L Delhi 304.70 279.70
Kolkata 352.05 327.05
Mumbai 349.50 312.05
Chennai 339.60 314.55

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Why oil prices should not fall beyond a pointBy J. Srinivasan, Business Line, New Delhi, December 23, 2008.

There seems to be no stopping the oil prices' fall, just as there was no stopping its rise earlier this year. Truly, oi's movement has been dizzy, climbing to a high of $147 a barrel in July only to drop to around $50 today, and set go lower. Though there is a contention that a significant part of the oil price rise was actually the fall of the dollar, certainly cheaper oil at the moment is good, when the world economy remains mired in the financial crisis.

Freed of worry from at least from one of the major causes of inflation, countries can with confidence resort to fiscal measures, print money, to re-inflate their economies. But the dropping oil price suggests a deeper malaise: Economies are slowing dramatically. That oil demand" should be sliding even as winter is peaking in the West points to the economising that are happening.

Is cheap really as good as it seems, prima facie? There are several downsides to very cheap oil, especially if the world's environmental health is to be maintained. As it is, the world consumes about 83 million barrels of oil a day, with just the US accounting for a fourth. If this level of consumption rises, the consequences for the environment can be disastrous.

Continued cheap oil is certainly not good for the producing countries. After some time, it will start knocking on these economies and that can cause serious internal pressures to build. Iran is a case in point.

Negative impact

With two-thirds of the world's oil located in the historically disturbed region, continued low oil prices can have negative local, regional and global impact. A curious position of the West Asian region is that if prices go up beyond a point, it risks external pressures. If prices drop below a point where they begin to affect the local economies, internal problems rise. Often, the social impact of cheap oil on such countries as Nigeria or Venezuela gets ignored.

Internal troubles in West Asia are bad news for everyone, in the region or away from it. At best of times it is a tinderbox, and oil can easily fuel a dangerous conflagration. If oil supplies from West Asia get disturbed for any reason the biggest sufferers would be the Asian economies, especially China and India. Unlike the US or Europe, India and China have a" limited diversity of oil supply.

Crude prices need to be high enough, in the words of oil guru Mathew Simmons, for "the piper to be paid adequately." If prices are lower than they need to be, it leads to instability and high volatility. It is necessary that countries recover at least their production costs. Else, there is no incentive for them to bring out the oil. They might as well sit on it, with adverse consequences for its prices and world economies.

In a perverse sense, high oil prices are forced savings for profligate economies, especially of the West. Since oil demand is inelastic, nations will buy even if prices go up. But then the money that goes out, at least out of the Western economies, usually returns as investments by oil-exporting countries which, barring some, do not have large enough economies to absorb incomes on such scale. The UK's Barclays Bank has just received West Asian investment.

But the real negative consequence of a low price is it discourages energy conservation. If prices remain low, large consumers such as the US, China or India has no incentive to reduce consumption. They will not hesitate to burn cheap oil. In these countries, usually, fuel prices are subsidised to make them more affordable. Cheap oil would exacerbate the low prices, ending conservation efforts.

If the American was loathe to conserving petrol it was because he had got used to ridiculously low prices in the 1990s that, adjusted for Inflation, were lower than at any time since 1919. Burning oil on such a scale can impose large environmental costs.

It will worsen the already damaged environment and when oil prices go up, as they will once economies recover, these nations will face the double-whammy of not just high-cost fuel but also large environmental cleanup costs. Low oil prices also stifle development of alternative energy sources, such as solar and wind.

Addictive
Cheap oil is a major disincentive to technological innovation. For instance, there will be no incentive for car-makers to develop hybrid or smaller cars; or for people to look seriously at these alternatives. Large cars could be back in fashion. It also kills investments in public transportation by governments and in cost-saving initiatives by individuals by, say, biking or walking.

Because of the climatic conditions in India these may not seem real options for the people but in the West they are very real alternatives, especially as demonstrated by northern Europe. Cheap oil's greatest impact is on the industry.

Low oil prices will, sooner or later, affect investments in exploration. With fewer undiscovered or virgin fields not open to oil majors, companies are reaching deeper into the seas or extracting oil from tar sands. These are expensive processes involving large investments.

Even in the case of normal wells, it is not as if they just keep pumping out oil. After a time they begin to decline. At this point producers have to spend considerable amounts to maintain output. Not only does oil have to be brought out of the well it has also to be brought to collection points or refineries. So, each link of the oil chain involves large investments and expensive upkeep.

Mathew Simmons rightly says low oil prices are as dangerous to economies as drugs to the human body. "Another consumption item that makes people apparently feels good as long as it is used." Once it effects begin to show, then things turn real bad. Using cheap oil can be dangerously addictive too. ___________________________________
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Diesel from fungus may be future fuel
Times of India, New Delhi, November 06, 2008

A reddish microbe found on the inside of a tree at a secret location in the rain forests of northern Patagonia could unlock the biofuel of the future, say scientists. Its potential is so startling that the discoverers have coined the term "my co-diesel" - a derivation of the word for fungus-to describe the bouquet of hydrocarbons that it breathes."This is the only organism that has ever been shown to produce such an important combination of fuel substances," said Gary Strobel, a professor of biology at Montana State University. "The fungus can even make these diesel compounds from cellulose, which would make it a better source of biofuel that anything we use at the moment."The study appeared in a peer-reviewed British journal, Microbiology Strobel, a 70-year-old veteran of the world's rainforests, said that he came across Gliocladium roseum thanks to "two cases of serendipity". The first was in the late 1990s, when his team, working in Honduras, came across a previously unidentified fungus called Muscodor albus. By sheer accident, they found that M albus releases a powerful volatile-meaning gassy- antibiotic. Intrigued by this, the team tested M Albus on the ulmo tree, whose fibres are a known habitat for fungi, in the hope that this would show lip. a new fungus. "Quite unexpectedly, G roseum grew in the presence of these gases when almost all other fungi were killed. It was also making volatile antibiotics," said Strobel. "Then, when we examined the gas composition of G roseum, we were totally surprised to learn that it was making a plethora of hydrocarbons and hydrocarbon derivatives. The results were totally unexpected and very exciting, and almost every hair on my arms stood on end." Strobel's team put the G roseum through its paces in the lab, growing it on an oatmeal-based jelly and on cellulose. Extractor fans drew off the gases exuded by the fungus, and analysis showed that many of them were hydrocarbons, including at least eight compounds that are the most abundant ingredients in diesel Biofuels have been promoted as good alternatives to oil, which is sourced from politically volatile regions and is a major contributor to the greenhouse effect.

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Photo Credit d70focus


Have you ever thought of any relationship between crude price and gold?

As for me, I have never thought of any such thing.

When the prices of petrol was rising many people offered theories why it is rising. A conservative blogger in USA even suggested that the reason is that India and China are giving subsidy to petrol, people getting it cheap and they dont value it as it is cheap. So there is more consumption and also more waste and hence there is this price rise of petrol in USA.

What a reason!

Even after subsidy we pay in India much more for a itre of petrol than what people pay in USA. I mean in terms of money. A litre of petrol in India costs Rs55/- which is around 1.31$. In USA you can buy lot more with this money than we can buy in India.

OK, let us forget about this now.

Why? The crude price is falling. And when it is falling people are finding reasons why it is falling.

Here is a reason published in an Indian newspaper. Surprisingly it links crude price with petrol.
Read below:


Ounce vs Barrel: Golden glow makes global crude oil prices slip
Economic Times, New Delhi, July 31, 2008

The fall in crude oil prices over the last couple of weeks has been attributed to changes in demand-supply conditions, but there is much more to this slide.

The reasoning that oil has risen far too much compared to gold a powerful relationship measured by gold-oil ratio (GOR-has been a trigger for the sell-off in oil contracts by investors, mainly global hedge funds, on overseas exchanges, a person familiar with the development said.

In addition to selling oil contracts, these investors have created long positions in gold, as the ratio indicates that the yellow metal is relatively inexpensive vis-a-vis the black gold. Accordingly, most analysts feel gold may outperform oil in the near-term, as the yellow metal is seen as a hedge against higher inflation, which has been mainly driven by oil prices.

"It (GOR) normally represents a good tool for investors to establish the relative of commodities. It clearly implies buy gold and sell oil," said Nomura International's Asia-Pacific strategist, Sean Darby.

Earlier this calendar year, the GOR, which is calculated by dividing gold price per ounce to oil price per barrel, was in the range of 9 to 11:1, but the ratio has slid to 6-8:1 of late.

The ratio rose to 7.5:1 on Tuesday, from 6.3:1 mid-June. Historically, many investors have seen buying opportunities in gold when the GOR is below 10 barrels/ounce. "Oil is now more expensive than it has ever been, some 30% above the previous peak in real terms," said Credit Suisse, in a recent global strategy report.

So far in 2008, crude oil on the Nymex has risen roughly 30%, even after coming off record levels, while gold has gained roughly 11% in the same period. Analysts, however, add that the GOR is not the only reason for the recent fall in oil prices of late. The likelihood of slackening of demand for oil from its largest consumers, including the US, China and India, due to economic slowdown, is believed to have investors reversing their long positions in oil contracts.

"Our own intuition is that we will reach peak oil demand (the point at which no further growth in supply will be necessary) long before we reach peak oil supply (the point at which no further increase in annual supply will be technically feasible)," Credit Suisse added.

Analysts said another reason for the fall in oil prices is the strength in the US dollar in the last couple of weeks. The dollar has an inverse relationship with oil, which means that oil weakens when the dollar rises.

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Here is a report from Economic Times, Delhi which says that is possible.

Read here.
Crude oil could slip to $78 a barrel: Opec chief
Economic Times, New Delhi, July 30, 2008

Crude oil prices above$120 a barrel are abnormal and could fall to $78 under the right circumstances, Opec president Chakib Khelil said here on Tuesday. If the dollar continues to strengthen and the political situation (regarding Iran) improves, the long-term price will be $78," Khelil told reporters in Jakarta, adding the market was well supplied with oil. Crude prices have doubled over two years but fallen from record highs of $ 147 a barrel reached earlier this month. They were trading at $125 on Tuesday. "There's a balance in the market. I would say stocks are at a good level and there hasn't been a disruption in demand," Khelil said.

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Here is an interesting article which is quite interesting.

Why oil is on the boil
By Jayant Manglik, Business Line, New Delhi, July 20, 2008

A look at factors affecting oil prices and the view from both sides of the fence - those who speak of exponential price increases and the ones who see them falling. In the problem of high crude oil price lies the solution. Crude oil news is usually frequent and occasionally dominant - as has been the case in the last few days.

The overreaching effect of the price of crude oil is something no one can ignore. And I guess when the price of something forces the Prime Minister of a country to address the nation; surely it's time to ask why. Oil prices have been increasing consistently for the last seven years and their seeming price-inelasticity and the ability to repeatedly make historical highs has spooked the most adventurous of analysts. Some have simply decided to speak of exponential price increases. An equal number are doubly sure that the price will fall from here on. The factors affecting the price and the view from both sides of the fence are enumerated below; take your pick.

Geo-political tensions seem to go hand-in-hand with oil exporting countries and heightened tensions are the cause of many a spike which takes a long while to die down. The price bulls point to a particularly disturbed environment in the Gulf and Nigeria today, while the bears argue that while the post 9/11 period was rough, it is relatively steady today. But the simmering tensions worldwide do keep oil on the boil.

Global demand continues to grow year-on-year. No argument on this but then again, whether demand growth will sustain is a matter of debate. The jury is still out on whether Chinese (and Asian) growth will slow down and statistics are being bandied about to prove it one way or the other. But it is pertinent to highlight here that till now there is no evidence to prove that high Crude oil prices have led to decrease in its consumption - yet. Perhaps growth in China, India, Brazil, Russia and other fast-growing nations more than makes up for the potential drop in demand from the US on account of its recessionary phase.

Supply issues are central to the whole debate. Surely the world is not out of oil but the last few years have had a Reserve Replacement Ratio of less than one - which is jargon for saying that more oil is being drilled out of the ground than is being discovered.

Considering that we're good for another couple of hundred years in terms of already discovered oil, I assume there is nothing to worry about but in a shortage situation any reason is enough to warrant panic. However, in a high-demand situation, every factor will get exaggerated and put upward pressure on prices.

Immediate oil availability is certainly a matter of concern. After the oil price tanked to $11 per barrel in the late 1990s, all plans of new refineries were shelved and expansion stopped. Today, the shortage of refineries has become a bottleneck in that even if enough Crude oil is pumped, there is just not enough refining capacity available to process it into end-use products such as petrol and diesel. This is likely to change as early as next year when several refineries worldwide start coming online, led by our very own Reliance Petroleum. But till then, refiners have upped their margins, making for costlier end products.

The newly acquired prosperity of several nations, including India, has played its part in convincing oil exporting countries to raise prices to levels the market can absorb. This is evident from the fact that crude oil prices have grown in tandem with increasing world GDP growth in the last few years and the increasing affluence has ensured that price increases are taken in stride. Whether the current levels are sustainable or not is something only time will tell but as of now crude prices continue to rise incessantly.

The strength of the US Dollar, or the lack of it, has aggravated the problem. Since Crude oil is denominated in dollars, a weak dollar may be forcing exporters to increase the prices of their product to 'make up' for the loss vis-A-vis other currencies such as the Euro and the Yen.

Because about 30 per cent of the world's production comes from OPEC countries, this is now accepted as one of the reasons for the recent price increase. As a corollary, crude oil prices are expected to fall as and when the dollar gains in strength, once the US is out of the financial quagmire it has dug itself into.

Financial investment is variously estimated to have fuelled the top 10 to 20 per cent of the price increase at any time. In other words, blame futures trading - something we are already adept at in India!

The fact is that, according to the US agency that monitors this, the speculative position percentage of the entire trading basket has remained the same over the last several years. More money has flowed in as investment, yes, but this is offset by increased consumption, trading and prices.

In problem lies solution too So till where can the prices go and when and how will things change? While it is impossible to define what price is too high to be absorbed by the world markets, it is also a certainty that the number exists! And at that level, high prices will stabilise before falling.

Therefore, high prices are not only the problem but also the solution. The increase in crude prices has led to more money being pumped into oil exploration, new technologies to increase production even from marginal fields and new investment into refineries, besides political pressure on oil exporting nations to produce more. High crude prices at a point become counter-productive if they lead to de-growth in user countries. So there will either be additional supply or demand will be adjusted to bring prices to acceptable levels.

OPEC-inspired price increases ended when they realised that high crude prices in the late nineties had wounded the East Asian countries, which were showing rapid growth till then, and OPEC was forced to increase production due to falling demand set about by high prices. This move, in fact, sent prices into a downward spiral (low demand and low prices).

It is entirely possible that the petering out of world GDP growth in recent months is partly on account of high-energy prices. But I wouldn't recommend taking a short position on crude oil futures just yet; one spike in prices could dent your bank balance severely!

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Like me most of you have experienced low milage of the car due to poor quality of oil or due to lesser quantity of oil delivery. Here is an article on check of adultration.

Stricter checks at petrol pumps to curb adulteration
By Sanjay Jog, Financial Express, New Delhi, July 22, 2008

Adulteration at the retail outlets (ROs) of oil marketing companies (OMCs) is going on unabated. In a serious bid to tackle the growing adulteration menace, the petroleum ministry plans to streamline the inspection procedure to check adulteration. The ministry has argued in favour of examining the inspection procedures afresh, as more and more dealerships are evading termination on account of irregularities being observed in the procedure of sample collection by inspecting officers.

The ministry has suggested number of steps, which includes a serialised document for preparing reports that should be documented and countersigned by the chief manager level officer, in order to avoid manipulation of reports by field functionaries. The inspection of samples at ROs needs to be done by officers other than the local sales officers.

The ministry also preferred surprise visits for sample inspection, but with the prior approval of a senior officer. Also, the inspection needs to be conducted within a given period of time.

The inspection officer must inform his senior officer after completing inspections and the exact time should be recorded in the report. This should be opened to scrutiny in case any dispute arises. Sources told FE that the idea is to bring in more transparency in the inspection procedure. The ministry has also sought views from OMCs on streamlining inspection procedures."

In case the dealer does not cooperate in investigations, he should be reported to the senior officer and the help of the concerned state agency may be sought. Further, depot samples and stock positions need to be checked by the vigilance wing of the company, on a regular basis and such reports should be forwarded to the marketing director through the chief vigilance officer on a regular basis.

The role of sales officers should be enhanced to improve the business skills of dealers and garnering business for their ROs, rather than routine inspections.

Meanwhile, the state-run IndianOil, in consultation with the petroleum ministry, has already taken some measures to audit the fuel quality at its retail outlets. These initiatives include regular and surprise inspections throughout the country, including rural areas and small towns, joint inspection by the officers of oil companies to identify malpractices and random sampling and testing of petrol bunks to stop erring dealers.

Moreover, IndianOil has now initiated a quality and quantity assurance programme, known as XTRACARE, to ensure that the quality of the product is not compromised, while transporting it from the depot to the consumers * tanks. This is ensured by using tank lorries fitted with tamper proof locks, comprehensive and multiple sealing of dispensing units, stringent periodic and surprise checks, comprehensive testing of samples, dedicated mobile inspection vans and stringent certification by a reputed, independent agency.

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Here is a very interesting article on Ten easy steps towards attaining energy independence. The author is a former chairman, ONGC and chairman TrldeaP vtLtd.


Ten easy steps towards attaining energy independence


The first meaningful and practicable step towards energy independence is to arrest dieselisation of India, without socio-economic disruption. Diesel has to be conserved, and diesel has to be substituted. Of several feasible options, ten are listed here; some will have immediate impact, and the others will make a difference over time. Any proposition with direct potential to create another speed-money bureaucracy has been excluded.

First, reduce peak-hour demand by banning lighting, whether from the grid or from gensets, for outdoor advertising between 6 and 10 pm. Besides saving energy, the darkened signboards will be a constant reminder that we live on money borrowed from future generations. Similarly, extravagant outdoor lighting, as seen in the malls and multiplexes and rich weddings etc. must be banned. Second, reduce overall demand by outlawing air-conditioning below 25°C in official (beginning with the government), commercial and public spaces.

Third, optimise power consumption by making a law to enforce use of state-of-the-art power management systems in official, industrial, commercial and public establishments before the next summer, and like in the Factories Act, make a whole-time director (joint secretary in the Government?) liable for implementation; repeat offence should invite mandatory penalty of say 0.5% of the turnover.

Fourth, immediately outlaw the practice of building bus bodies on truck chassis, and stop the ongoing wastage of diesel in avoidably higher-powered engines.

Fifth, diesel is the world's most efficient internal combustion engine. In recent decades, diesel engine performance has been significantly improved, with higher efficiency and lower emission. In India, the focus has been on fuel quality improvement and Euro IH standard has been implemented, with Euro IV coming in shortly. Indian manufacturers have not achieved corresponding improvements in the engines used in transport, industry and agriculture.

They have been allowed long enough time; implementation of prevailing EU standards on diesel engine efficiency and emission must be statutorily mandated effective say, April 2009; manufacture and sale of sub-standard engines must be outlawed from the same date. This will bring in substantive and sustained saving in diesel consumption.

Sixth, the BRT corridors offer an excellent opportunity to operate electric trolley bus shuttles, saving diesel and CNG (we have a shortage of gas as well and international gas prices have been spiking like crude).

Seventh, India has one of the smallest reserves of oil & gas, and one of the biggest reserves of coal. Railways must switch back to steam engines for long-haul freight like coal and ore. It'll be cost-efficient for the economy as a whole for the Railways to absorb the consequential losses, if any, rather than issuing oil bonds for tens of thousands of crore.

Eighth, Petroleum Conservation Research Association (PCRA) was set up after the first oil shock, by a visionary chairman of IndianOil, late CR Dasgupta. At that time, the name was Petroleum Conservation Action Group (PCAG), and chairman Dasgupta assigned one of the best and the brightest executives from his company to head the nascent organisation. A team of high-energy high-competence officers was seconded by the oil companies, and even today, the agenda they had initiated remains valid.

Over the years, PCRA has become one more parking spot for joint secretaries reluctant to revert to the state, and the companies are not very particular about their nominations. The main agenda for PCRA now is an annual carnival of "Oil Conservation Fortnight" with plenty of photo opportunities. It's high time to thoroughly revamp PCRA with competent and committed professionals, update the agenda to meet today's challenges, and measure their contribution in quantitative terms.

Ninth, a significant quantity of diesel used for power is stolen from major consumers like the armed forces, railways, state transports, municipalities and government/public sector factories. As it is, it's become cheaper to generate power from diesel rather than fuel oil-an unbelievable travesty, and stolen diesel is still cheaper!

The only effective solution is for the concerned organizations to monitor the actual average consumption figures with the manufacturer's specifications, with appropriate minor adjustments for the condition of the engine and the parameters of usage. There is no shortage of "vigilance officers".

Tenth and last, all barriers set up for tax collection (entry tax, sales tax etc.) must be re-designed to take the traffic load, and operated electronically. This is no rocket science. This is one case where the funds from the Oil Industry Development Cess, hijacked by the finance ministry, must be utilised; individual states and municipalities etc. are not likely to spare the money for such facilities and even if some did, it is important to have all-India standardization of the lay-out and the electronic process. This national change-over should be targeted for completion by say, March 2010. Besides significant saving in diesel, such a process will also check rampant leakage of revenues.

You can read more on petrol and diesel related posts here
and also here and here

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Govt asks oil cos to stop setting up of new petrol pumps
Pioneer, New Delhi, July 15, 2008

The Government has asked state-run oil firms to stop "indiscriminate" setting up of petrol pumps in the country. IndianOil, Bharat Petroleum, Hindustan Petroleum, who currently own about 37,000 petrol stations in the country, have been asked by the Petroleum Ministry to stop "indiscriminate" expansion as it was one of the reasons for mounting revenue losses on fuel sales, a senior official said.

"There is no ban as such but we are discouraging them from setting up new outlets in already saturated markets," he said. The companies can, however, set up new petrol pumps in the areas so far untouched by the retail network.

Despite price hike last month the oil companies are losing Rs 14.92 per litre on petrol, Rs 24.90 per litre on diesel, Rs 38.09 per litre on kerosene and Rs 338.53 per every cylinder of LPG.

The revenue losses of the oil firms amount to Rs 715 crore per day and the projected revenue loss of these companies for 2008-09 is Rs 2,11,400 crore.

You can read more on petrol and diesel related posts here
and also here and here

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Why Petrol prices are not same throughout India?

This is because of following reasons:

There are differnt tax structures in the Indian states.
There is central tax and there is also a state tax.


So the he Petroleum products are taxed by the centre ans also by the state.

Now each state has its own tax rates. Some higher , some lower when compared to another state.

That is the reason why petrol is cheaper in one city than another.


The other reason is the transportation cost involved in supplying the petroleum products from the plant to various parts of the country.

Another reason is political, some states for taking a populist stand, intentionally keep the taxes lower.


You can read more on petrol and diesel related posts here
and also here and here

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This news is sourced from Norteastonline

Mizoram is a northeastern state of India.

Aizawl, Jul 11 : Petrol, diesel and LPG have become cheaper in Mizoram after the state government slashed rates of sales tax on the items.

Petrol became cheaper by around Rs 4 a liter while diesel price also came down by Rs 1.80 per liter and a cylinder of LPG is cheaper by Rs 17.50.Local cabs had increased the fares in Mizoram due to steep fuel price hike by the Centre. Prices of essential items too shot up due to hike in fuel price.

With the cut in sales tax on petrol and diesel, these items would be the cheapest in Mizoram among the north eastern states.

You can read more on petrol and diesel related posts here
and also here and here

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Boil of oil: Let us tackle it with toil
Deccan Herald, Bangalore, July 07, 2008

High oil price is a stark reality we can't wish away. Instead of brooding over it, we must find ways to reduce our dependence on oil. Dilip Maitra suggests several measures that can help in the short and long term. Let us begin with a prophetic quote: "People who think that oil prices will go down once production is raised are wrong because there are indications the prices will remain high.

Consuming countries should adapt with the prices and tools of the market and to solve their issues with a fair logic" these were the words of King Abdullah the ruler of Saudi Arabia, the world's largest producer and exporter of oil. Saudi is currently pumping out at the rate of 9.7 million barrels of crude oil a day accounting for nearly a fourth of the production by the Oil Producing & Exporting Countries (OPEC). The Saudi King was quoted on July 1, 2008 in an Arab paper in the context of world oil prices reaching the record $144 a barrel.


The King knows what he is talking about? And we know that his words must ring an alarm bell for us. The global supply of oil is now hovering around 88 million barrels a day, which is just about enough to meet the global demand. As America continues to guzzle nearly a fourth of world's consumption, use of oil is rapidly increasing in fast developing countries like China and India. Moreover, oil has become the hottest target for the commodity speculators whose total exposures in commodity speculation are presently estimated at $300 billion. International oil experts believe that oil prices, which have nearly doubled in the last one year to $144 a barrel, will only go up from here and may even reach $200 by the end of 2008.

So what does this mean for us? Fasten your seat belt tightly and get ready for a turbulent journey that may last for half a decade. Yes, we are talking about the future of India where the global oil prices will take the centre stage and most of the counter measures by the government will have a little impact.

Huge burden
If pessimism today is all pervasive there are reasons behind that. India's current monthly oil import is averaging at $7.7 billion (Rs 33,000 crore) and at this rate our annual oil import bill will touch Rs 470,000 crore and the annual subsidy from the government to the oil marketing companies is likely to touch Rs 250,000 crore even after the recent price increase and duty cuts.

This huge burden along with subsidies on fertiliser and food grains is likely to cause a major imbalance in the government's balance sheet in 2008-09 by increasing its budget deficit.

No place to hide
Rise in oil prices has pushed up the overall rate of inflation to a 13-year record high of 11.64 per cent. Inflation will gallop as and when the petrol, diesel prices are raised again.

It is always better to pass on the increased oil prices to consumers because price protection through subsidies does not force a cut in consumption and ultimately benefit oil-producing countries. If increased cost of oil is not passed on, the government's subsidy bill will rise forcing it to print more money leading to over all inflation. We are hit, either way.

With the rise in international prices oil companies are suffering from huge under recoveries. At present price oil marketing companies lose Rs 15 on a litre of petrol, Rs 25 on diesel, Rs 38 on kerosene and Rs 338 per LPG cylinder. Of course, the government gives them oil bonds to meet the gap but they are never on time and always inadequate to meet the working capital need.

Not so helpless
Now the question is what should we do? Suffer helplessly to the whims and fancy of the oil producing countries or think seriously how to lessen our misery? Actually there are quite a few things we can do & vehicle pooling: According to a study done by a New Delhi based energy research, 80 per cent of the passenger cars, utility vehicles and two wheelers on Indian roads ply with only person in it. This means that there is immense scope for car-pooling by forming small groups traveling in same vehicle to same destination. Internet is a great enabler to achieve this.

Drive electric vehicle: Switching over to battery operated bikes; scooters and cars can significantly reduce your spending on oil. The running cost of an electric scooter, for example, works out to only 10 paisa a km against Rs 5 for a small petrol car or Rs 4 for a diesel car. If a person consumes 50 litres of petrol in a month at a cost of Rs 2900, he might be able to save at least Rs 2000 a month after factoring in recharging cost of electric scooter and limited usage of the car with the family.

Of course, driving a scooter cannot be as comfortable and safe as car, but you can't gain without any pain. Reva Electric is producing electric cars and there are number of manufacturers for electric bikes. A Delhi based company is working on an electric three wheeler that can carry passengers.

Better usage of autos: in many small towns auto rickshaws ply between two fixed points at fixed fare. This concept can be tried in large cities like Bangalore and Hyderabad to reduce cost of traveling and lower oil consumptions. We should leave our vehicles at home and seriously consider using city bus services or metro services to work, even if it means spending more time commuting, The savings will be huge.

Lower gas consumption: To save on cooking gas, whose price has shot up in tandem with oil price, housewives should try microwaves. It is myth that microwaves are not suitable for Indian cooking. Most dishes can be cooked correctly and quickly A housewife pointed out that by using microwave she could save Rs 170 a month on LPG, while the electric bill went up by Rs 30 a month: a net savings of Rs 140 a month or 38 per cent.

Long-term strategy
The short-term measures will give us some small relief, but real solution lies in a broad and long term energy policy.
Here the government policies will play the key role in creating an ecosystem that will not only reduce our dependence on oil but will also increasingly harness usage of renewable sources of energy Since India has abundant reserve of coal, we must use it more to fulfill the energy need.

As coal is much cheaper than oil, it can be used to produce more electricity that will replace oil through improved battery technology The problem air pollution associated with coal based power plants can be addressed to a large extent by promoting technology that liquefy coal.

On the east coast of the country huge reserve of free natural gas has been discovered and a few private companies have already started the exploration. This gas can be used for cooking through piped distribution and also for running trucks and busses. In the national capital Delhi, the success of CNG in replacing diesel and petrol for trucks, buses, autos and taxis is a good example of what can be achieved if there is political will.

Unfortunately usage of natural gas in several applications is stuck due to nonexistence of a proper gas pricing policy, thanks to bureaucracy in Delhi and in gas producing states.

Rather than subsidising oil, which only adds to the profits of oil producing countries, the central and state governments must provide subsidy to promote battery operated scooters, bikes, three wheelers, cars, buses and trams. Delhi, Madhya Pradesh and Jharkhand are some of the states, which recently announced 40 per cent subsidy on electric scooters.

Governments can provide financial assistance and subsidy to mass transport systems of metro rail, monorail and road transport. This will help create sustainable long-term solutions for people's movement and reduce oil consumption. Singapore's excellent metro and bus services are a good example of what can be done.



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and also here and here

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Recent Petrol and diesel prices in India July 2008

…………………….Petrol….. Diesel
Mumbai………….Rs. 55.51 Rs. 39.08
Kolkata………….Rs. 53.95 Rs. 26.92
Chennai…………Rs. 54.61 Rs. 37.40
Delhi…………….Rs. 50.52 Rs. 34.76
Bangalore………Rs. 57.86 Rs. 39.44
Jaipur……………Rs. 53.62 Rs. 37.17
Ahmedabad…….Rs. 54.93 Rs. 40.80
Lucknow………..Rs. 57.50 Rs. 37.50
Trivandrum…….Rs. 53.32 Rs. 37.95
Patna……………Rs. 56.35 Rs. 37.96
Bhubaneswar….Rs. 51.62 Rs. 37.66
Chandigarh…….Rs. 51.19 Rs. 34.69
Bhopal…………..Rs. 55.62 Rs. 39.43
Dehradun………Rs. 51.65 Rs. 36.78
Hyderabad……..Rs. 57.65 Rs. 38.30
Surat……………Rs. 55.65 Rs. 40.25
Noida…………..Rs. 53.49 Rs. 38.69
Gurgaon……….Rs. 50.96 Rs. 34.75



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and also here and here

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Hi,
There is a poll here in my blog. Cast your vote and see what others have voted.
The issue is "What would be the price of petrol per litre after the present hike"
=Ostom

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