Oil Subsidy. my Foot!

The retail price of a gallon of petrol in USA is $2.824 USD. Source
A gallon is 3.78541 Liters
So 1L of petrol/gas costs $ 0.746 USD
I USD is 39.345 Source Yahoo
So after conversion 1L of petrol costs 29.35222 INR in USA

The why on earth does Indian Government charge me 50.60 INR per liter? (retail price in Bangalore)

Whats worse they give me all sorts of crap that how fuel subsidy is breaking their back and why the oil price should be raised…
For heavens sake you are charging a 72% markup. I don’t care where whether you are losing it in an oil spill, or because you have lazy public sector workers… the bottom line is the Oil PSU have monopolized the retail of Oil and formed a Cartel. The MRTP (Monopolies and restricted trade practice act) should be enforced to find out how they can over charge the customers.
SEBI should start a probe to probe how can a company who is overcharging common man is losing the public money

The story of Diesel is also no different. The prices in India are 20% higher than that in the rest of the world.
In kerosene I agree that the price of the fuel distributed in PDS (ration shops) is subsidized, (but that is required to curb the unhealthy practice of burning firewood and cow dung cakes). And Please do not quote this as an argument. because this subsidy is not borne by the oil companies. The government buys all the food grain and oil at full Price for the PDS and then redistribute it for social causes.

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8 thoughts on “Oil Subsidy. my Foot!

  1. dude uve got it all wrong
    u me n the oil cos and their shareholders are all cheated by guess what ?

    THE GOVERNMENT —THEY CHARGE A BOMBSHELL IN IMPORT DUTY OF OIL WHICH IS CLOSE TO 40+% IF IM NOT MISTAKEN IT IS A VERY BIG REVENUE EARNER

    WHY DO U THINK MURLI DEBDA KEEPS GOIN TO THE FM TO GET THE DUTY LOWERED?
    THEY FOLLOW THE EUROPEAN SYSTEM OF DUTY AT LANDING OR SOMETHING OF THAT SORT
    IN AMERICA THEY DONT TAX OIL AT CENTRAL LEVEL

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  2. exactly…
    the money is shifting from one government pocket to another….
    government charges ridiculously high import duty/exercise duuty/state sales tax etc. on crude (and pockets the sum) then it realizes that if it passes on the duty to the public then nobody will buy it and there will be uprising… so it subsidizes it….

    essentially the concept of oil subsidy bill bloating is a myth… for this subsidy exceeds the tax collection from oil.
    however it is done in such a way that petrol retailing is rendered economically inviable… and hence the PSU will never face any competition from Shell or reliance and other private players.

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  3. nobody likes to buy a loss making enterprise… so i think the stocks r fairly priced.
    however i could not understand what will change when the stock holding will fall.
    as long as government has management control (25% of the outstanding stock) the fundamentals will not change….
    plus i do not see government issuing FPO to fund the subsidy

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  4. i agree… to me socialism is:
    1) telling lies and misleading the masses
    2) robbing of the poor from serving a genuine business need.
    3) robbing the poor of their chance to escape poverty and sell it in such a way that the poor look forward to it

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  5. Pingback: Mid Month Musings May 2008 …part 2. « Tech and Trek

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