There was a nationwide bandh on July 5, 2010 against the increase in prices of the fuel. The basic rise in fuel has happened due to marking of the the prices of crude oil and related products with the current market prices. Though based on Fundamentals on economics, I totally support the market based pricing regime. But still I support the Bandh, as the oil is one of the highest taxed commodity in India despite the dependence of the economy and the common man.
Currently Price of Crude Oil is – USD 73 / Barrel
1 Oil Barrel = 158.9873L
Assuming the Going rate of USD – 46.79
1L of Oil when converted to Indian Price should be – INR 21.48392 /L
Now even If I assume a 100% of markup for transport, refining and distribution the oil should not be more than INR 43/L
Unfortunately I pay around INR 58.09/L so approximately 270% of the cost of the oil.
That too when the Oil marketing companies and refineries for the most part have been PSUs and been operating out of the tax payers aid. I would seriously like to know why as a consumer I should be taxed so high for the petrol which is a primary commodity for my commute?
No wonder I support the Bandh
by Prats | on Monday, July 5th, 2010 at 11:24 am | 
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July 5th, 2010 at 11:39 am
Agree with u
July 5th, 2010 at 12:09 pm
[...] This post was mentioned on Twitter by Prateek Gupta, Vkey. Vkey said: agree wth writer RT @prateekgupta: Why I support the Bandh http://consulting.prats.co.in/why-i-support-the-bandh/ [...]
July 8th, 2010 at 8:39 am
Buddy, There is remarkable difference between Crude and Gasoline (Petrol and Diesel). You have mentioned the price of Crude in international market and not the petrol, which is refined product from Crude. Btw, there is approx 80% excise, which is applied on the gate of refiners and approx 40% extra money, which goes in state tax, Octroi, Metro Cess and the Dealer margin. It would be good if you compare the price of Petrol from a developed country like UK and India. WATDaYaSay?
July 10th, 2010 at 5:33 am
@Sachin: I agree to that thats what I am saying that we pay 270% over the crude price…Even if we consider 100% as the operational costs which is very high for business ops still a huge amount is what we are paying in the taxes. I didn’t compare the two as didn’t had enough data for the structure of taxes in dev countries like UK, US and also UK & US have a significant stake in exploration which would also be a factor in how and why the things are different when it come to the pricing and competitive pricing.
July 30th, 2010 at 8:38 am
See I feel that we are confusing between 2 issues. Decontrol of fuel prices was needed badly because polictical parties were using it as a tool for their benefits. The so called subsidy was being paid out of ppl who are paying taxes. These subsidies actualyl benefit the ppl who evade taxes.
Do you know the petrol prices in contries like Pak & Nepal? They pay 76.86/ ltr & 85/ltr respectively.
What is wrong in the whole process is the taxation part! Which shud really be rectified. As far as oil cos making money is concerned all they get is oil bonds which come with a time period. So even they aren’t making money. ANy way have sent a mail to you!
And am totally against these bandh because they serve no purpose. BJP Which was leading the bandh was the very same party which had dismantled APM which paved way for the decontrol of prices! SO it is nothing but politics for them. They are protesting because they have to not that they care.
July 30th, 2010 at 9:14 am
@Smita: Agree on this, and it is the same thing I have posted about the tax being paid on oil prods. My point is to decontrol they need not increase the prices rather just reduce the taxes and they would have done fine….