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Thursday, May 08, 2008

Diesel: Out of Stock

If you have a diesel car be prepared to see these boards the next time you are all set to Refuel your vehicle.Rising gas prices and the inability of the government of India to increase prices or cut down subsidies on diesel means diesel is killing our oil companies.

I blame the government of India for this situation.For how long are petrol car owners and airline travelers going to pay the bills for diesel vehicle owners.Diesel is the highest subsidized fuel in the country costing the oil companies Rs.35,318 in under recoveries compared to Rs.19,110 for the poor mans fuel[kerosene] and Rs.7,323 for petrol.Why this huge subsidy for diesel?

This anomaly has meant people care a damn about fuel efficiency when it comes to diesel vehicles and are ready to buy gas guzzling suv's and powerful cars which aren't so miserly when it comes to fuel consumption.Also who is benefitting in the end.Is it really the poor who are making use of these subsidised rates.Diesel accounts for 42% of india's fuel sales and this includes the super rich who buy SUV"s like the Audi Q7 to benefit of this price difference.Infact I go onto say that Suv's are still doing well in India only because of this huge subsidy on diesel.

For the moment the oil companies say they will try to sell premium petrol and diesel in metros[once again petrol buyers have to pay for somebody else's diesel].Normal petrol should be available in metros but diesel may just not be stocked.Also Oil companies would cut down on diesel imports so the amount of diesel sold would be limited.

But these are all short term solutions.The government needs to take a firm decision regarding its diesel pricing policy in the Indian markets.

[Source:Economictimes]

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