SUV Owners Must Pay Full Price for Diesel


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Continuing with his attack on diesel-guzzling cars like sports utility vehicles (SUVs), environment minister Jairam Ramesh on T u e s d ay asked users of such cars to pay full market price for the fossil fuel which is being sold at subsidised rates for farmers. “Why should they get subsidised fuel meant for farmers,” Ramesh asked while speaking at a conference on 5th Sustainability Summit organised by CII. “We introduced (diesel) subsidy for certain economic purposes, but have ended up with a wholly different purpose...,” he said while favouring incentives to the firms aiming at sustainable development. However, he made it clear that his “deliberate” criticism of the vehicles, which had created somewhat of a controversy recently, need not be seen as being anti-automobile sector. “I am not knocking the growth of the automotive industry, but those who want to use diesel cars must pay the full market price for the fuel. Why should they get subsidised fuel meant for farmers?” he said.

Ramesh said there was a need for creating an incentive structure from a fiscal point of view, particularly, which rewards, and added that stimulating sustainable development at the producer-end is absolutely important. The remarks by Ramesh, who had earlier called SUVs as criminals and Socially Useless Vehicles for being bad emitters, has raised a storm in the auto sector with BMW manufacturer Germany taking a serious exception to it.
The minister also called for an incentive structure which has to be skewed in favour of sustainable development choice as far as consumers are ready to embrace such mechanism. “We need to move to a system which looks at rewarding or provide incentives to those companies that actually promote the objective of sustainable development, that promote energy conservation, water conservation and protection and preservation of natural resources,” Ramesh said. Source:TOI
 

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This is what was reported in the Deccan Herald today:

“It’s criminal in India with the type of society we are in. The luxurious growth of large-sized vehicles and SUVs in our country is really a cause for great concern,” The owners of these vehicles in India include politicians, businessmen, sports and film personalities.

The diesel-guzzling SUVs are put on roads taking advantage of a government subsidy on diesel to benefit farming and heavy duty transport sectors. The subsidy, though reduced by two rupees when petrol prices were deregulated last June, is still incentive enough for the affluent to go for SUVs.

-Jairam Ramesh



Angered at the ‘misuse’ of this subsidy, Ramesh said the trend cost state-owned oil retailing companies Rs 3 on every litre of diesel. In the current fiscal, the loss could be anywhere upwards of

Rs 20,000 crore. He also raised doubts whether the subsidy was actually benefitting those for whom it is in place—the poor and the farmers. To him, the best way to curb the trend is to impose a stiff penalty rather than a blanket ban on the use of big cars. “We seriously need to give a thought to a fiscal policy regime that discourages use of heavy cars and SUVs particularly,” he said.

-as seen reported in the Deccan Herald



Now most of you Diesel powered guys will probably hunt me down and kill me for what I am going to say next about this. But its okay. I dont mind being hit but I still need to have my word out.[:)] And No offence to anyone in here.

First of all, Diesel was subsidised for farmers and logistics, Logistics in the sense the public transport and trucks that haul all things across the nation. So we could all buy our essentials and not so essentials at a moderate price.

Now ages pass after this system was introduced. (I remember the days when we had just two jeeps and one car in our entire village.) Situations change,so do people. Many people are in a situation where they are able to afford almost any car that the richest person on planet earth can afford.

So what? Well these rich people still want to save their money even if its just peanuts and go for Diesels and get the benefit of the government handout called 'subsidy'. (Every Beemer I saw in Kerala is a Diesel so are the Mercs, and there a lot of Beemers and Mercs down here.)

These people also benefit from the subsidy which also consist of the hard earned money paid as petrol tax by people like Tom, Dick and Harry who pay this after running around, breaking their backs, getting hit by the elements, riding from pothole to pothole on a motorcycle and still Tom, Dick or Harry for that matter get no subsidy and cant afford a Diesel car. Still they have to pay a premium to buy petrol for their rides or 'piddly mopeds' in the language of some affluent I personally know. I dont want to say who.

So what is the situation at hand now? Almost every auto maker is into making Diesels and soon enough there will be nothing but a handful of bikes that run on petrol. Even most of the autorickshaws on the road now are Diesels. And every person I know who is a prospective car buyer wants to buy a Diesel car. Nowadays almost no car buyer has any problem with the affordability factor as before as there are a lot of banks and institutions offering loans at very attractive rates.

I know that Jairam Ramesh has been harsh with his words and maybe has not shot the arrow in the right direction and has in the process raised some eyebrows. In my opinion what he should have thought about implementing was to raise taxes and duties of Diesel cars and so people who could afford flashy barges would look at Petrol mills rather than Diesel and relieve some burden off the government subsidy funds.

And by the way, Even if I were rich, I would still drive a petrol and I do not support Jairam Ramesh on all counts nor am I a fan of his.
 
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Akash

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@Jalex- I agree with you to some extent, but any day if i earn, i would like to save my money on fuel costs by getting a diesel car.

I agree that the subsidy was intended for the farmers and similars, but if i can save a few bucks, then why not. IMO the taxes paid by people buying petrol isnt used in a wise manner. Somehow i have no sympathy towards govt. We all pay road tax etc, but where are the roads.

Even i am a petrol head and our family has never owned a diesel car, however with ever increasing prices of petrol and equally refined diesel i am damn sure my next car would surely be one with a diesel heart.
 
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@Jalex- I agree with you to some extent, but any day if i earn, i would like to save my money on fuel costs by getting a diesel car.

I agree that the subsidy was intended for the farmers and similars, but if i can save a few bucks, then why not. IMO the taxes paid by people buying petrol isnt used in a wise manner. Somehow i have no sympathy towards govt. We all pay road tax etc, but where are the roads.

Even i am a petrol head and our family has never owned a diesel car, however with ever increasing prices of petrol and equally refined diesel i am damn sure my next car would surely be one with a diesel heart.
Well, Akash the problem here is either the government tax us in another way to get relieved from the burden the subsidy creates or to make Diesels dearer with a tax slap. I guess the easiest way and the solution is to slap a hefty duty along with a yearly tax. And dont think that any burden on the nation is not going to be carried over to the people. It will affect one and all.

And yes there are a lot of issues which we have to fix in the country, But that doesn't mean that we shouldn't try at all. This can be for starters. (And talking of roads, I hit the underpinnings of my car starting from the lower arm till the rear axle last day. The pot hole was a crater. I was bullied into it by a Bus.)
 

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Well, Akash the problem here is either the government tax us in another way to get relieved from the burden the subsidy creates or to make Diesels dearer with a tax slap. I guess the easiest way and the solution is to slap a hefty duty along with a yearly tax. And dont think that any burden on the nation is not going to be carried over to the people. It will affect one and all.
Completely agree with you.

(And talking of roads, I hit the underpinnings of my car starting from the lower arm till the rear axle last day. The pot hole was a crater. I was bullied into it by a Bus.)
I guess that happens with most of us. You can look at my car which is still having the dented running board.
 
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i wonder what are you guys talking about ?
what kind of subsidy is being availed in india on diesel. i know that kerosene in government ration shops cost just 8 or 10 rupee per litre.

every body knows that diesal is cheaper than petrol in every country on this planet.
so what is this all about on suvs mr jairam is shooting? another media propaganda or just slip of tongue?

india could have saved billions on fuel if it had good roads and planned traffic systems.

just look at those government and police vehicles the worst maintained and worst fuel efficient ones could be from them.

isnt it embarrassing for india to talk about expensive diesel cars .
as usual diesal is much environment friendly than petrol....
soon enough there would be arrival of electric cars and suvs so what could be the next issue-on electrical subsidy for households?
 

raj_5004

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that is exactly my point... Where are the taxes we pay going to? how is the road infrastructure in india? Heck, a police mahindra jeep pollutes & consumes more than than the 4.0 Audi Q7! In every country, diesel is cheaper, not just India.

We have many, more serious issues to look into. So Mr. Jairam Ramesh, IMHO you should spend your wise brain on something else...
 

Akash

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that is exactly my point... Where are the taxes we pay going to? how is the road infrastructure in india?
I guess these taxes are used wisely by our Faithful politicians for various social activities like SCAMS.
 
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Jayadev, The price of petrol and diesel comprises of taxes mostly,almost near 50% and the taxes on Petrol I believe is as follows: (These rates are as of on July 2010, I dont know the current rates)
Excise duty : 14.35 rupees per liter
Customs duty : 7.5 percent
Sales tax or VAT : 20 percent.

Well that may seem to be a lot,but you have to take this into account that we are a country where almost everyone loves evading taxes. My family for instance is the only family in our village with a ration card that has a declared 5 figure monthly income. The ration shop dealer told me this. And there are filthy rich people living around here with ration cards that have declared 3 and even 2 figure combined monthly incomes.

If it weren't for the fuel and vehicle taxes. Our country would collapse. We literally run this nation on the combined automotive sector generated taxes. Its a fact and we cannot say that fuel should be given with subsidies on taxes to people who have no problem at all to pay that extra buck. It is anything but fair.
 
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I guess these taxes are used wisely by our Faithful politicians for various social activities like SCAMS.
Ok OT, but still. Scams do happen, and they are cancerous. But let me ask what any of us in here has done to bring a corrupt official to his knees? Its us that is the reason that they jolly good go around like this even after getting exposed. And do you know almost 95% of people who see ministers see them to get something done for themselves through the back door? Has anybody thought about that?
 
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Well that may seem to be a lot,but you have to take this into account that we are a country where almost everyone loves evading taxes. My family for instance is the only family in our village with a ration card that has a declared 5 figure monthly income. The ration shop dealer told me this. And there are filthy rich people living around here with ration cards that have declared 3 and even 2 figure combined monthly incomes.
well i appreciate your actions and include our family too in same.
otoh its every citizens right to have government subsidies and government has liabilities for same , its silly to note down the salary figures on ration cards. 2 and 3 figures are quite common in kerala with most family members dwelling in middle east.

If it weren't for the fuel and vehicle taxes. Our country would collapse. We literally run this nation on the combined automotive sector generated taxes
its a joke . i can only laugh off at such realities as automotive sector had a boom in recent 10years in india .

Its a fact and we cannot say that fuel should be given with subsidies on taxes to people who have no problem at all to pay that extra buck. It is anything but fair.
the wise decision should be to increase the duty on such luxury which could compensate for the subsidies .
 
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Its foolish kinda to say that suv owners must pay higher price for their fuel - diesel.

India is a diesel heart . Every one earns hard (except few) and at the end we want luxury at cheapest best available option.

How many takers for scorpio petrol with a Renault heart?
though its 9L + vehicle i can see lot of vehicles on road , where as people like me stares at the emi , that i need to pay even for a figo diesel.!

I know the fact that petrol cars are cheaper and refined!
though modern diesel are refined no way comparable to petrol cars.
BUT If the running is high side - i may take up a diesel to save on running cost
yeah i agree diesel spares are some what costlier than other.
But todays trend is get a car esp diesel and sell it after some 4 to 6 years later on. so why not a diesel. ?

Though we can see lot of cars in city , there are numerous towns , where owning a car is still a big dream.

So subsidary for diesel - to maintain essential commodities at lower price is still needed.

When i had a cycle , i got a garlic at 30 per kg
Now its about 130~150 per kg.
dont imagine a high time gap , its just a time gap of 8 year
The diesel price was approx 20~22 at that time.
Now its in 40ies.
So the price must have doubled , but in this case???

ask the minister jairam to check these.

If he really want to save nations money .
ask him to cut off his unwanted escort jeeps
ask him to travel in public bus or trains.
Atleast ask him to cut off ac in his cars.
All govt office must have a 800 or a indica esp the indicab.

When a PM travel in bmw , why not we people who selected him travel in a car that we wish.
more the suv , more the sale tax , more the consumption of diesel more tax through them.

I agree that diesel price should be controlled as majority of people , even in metro depend on them , a increase in price is a night mare for them ,

But to the topic , why the minister , is so particular about the suv's?
lot of diesel wastage is done by the govt itself.
 
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