Karnataka-Maharashtra vehicles line up at Goa petrol pumps
GOANEWS & PTI, PANAJI | 02 April 2012 21:52 IST
Vehicle owners from neighbouring states queued up at petrol pumps in Goa today as the government decision to slash petrol prices by Rs 11 came into effect from today.
The petrol pumps dried up by afternoon all over Goa as vehicle owners were waiting for 2 April to fill their tanks.
Petrol in Goa now costs Rs 54.96 per litre.
Private vehicles from Karnataka registration numbers were seen lined at different petrol pumps in Canacona.
Similar was the case in Pernem, with vehicles bearing Maharashtra registration numbers
In spite of such rush, Goa government would not benefit financially since the VAT on petrol has been slashed by 22 per cent, leaving only 0.1 per cent VAT.
The petrol pumps ran dry by afternoon owing to mammoth rise in customers forcing the petroleum firms to send additional tankers at various fuel stations.
The vendors at the petrol stations stated that majority of the people were topping up full tanks which drained the stocks within hours of the opening of the station.
Cars were queuing on the road to get into the petrol station, causing a problem for other road users.
There were serpentine queues of the two-wheelers too, which had chocked the traffic further.
"There were queues even before we came here at 7 am to open the station. This was not expected. People should know that the reduction in prices is not just a day-long phenomenon. This should stop this panic-buying," the vendor commented.
Goa Petrol Dealers Association President Paresh Joshi said the scarcity of fuel was a temporary phenomenon.
"People were waiting for today to fill the petrol as it would cost cheaper. Also several fuel stations had not accepted the stock on Saturday as they will have to bear the Value Added Tax (VAT) on it," he said.
Chief Minister Manohar Parrikar had said he was ready to abolish entire VAT on petrol but negligent 0.1 percent is retained to know the quantum of petrol sold in the state.
Money collected from 0.1 percent VAT will also be utilised to fund the monitoring mechanism on the borders to ensure that there is no smuggling of the fuel to neighbouring states.
The BJP in its manifesto for March 3 elections had promised to slash the petrol prices. The assurance was fulfilled in the state budget presented on April 26.
On 30th/31st and 15th of every month, they use the average price of international benchmark and foreign exchange rate in fortnight to decide what should be the price of fuel from 1st and 16th of every month respectively.
Oil firms hadn't revised prices Sunday and are looking at doing so today.
Global gasoline prices (against which domestic petrol prices are benchmarked) have risen from USD 109 a barrel at the time of last revision in December to USD 134 per barrel.
Oil firms had last revised dates on December 1 when rates were cut by Rs 0.78 per litre. Petrol at IOC pumps in Delhi is currently priced at Rs 65.64 per litre and the rates vary by a couple of paise at the pumps of BPCL and HPCL.
IOC, BPCL and HPCL use fortnightly average of benchmark oil price and exchange rate to fix the price to be paid to refineries on 1st and 16th of every month.
If the changes do not reflect in retail selling price, they become losses in the books of oil firms.
Petrol price was freed from government control in June 2010, but public sector companies continue to informally consult their parent Oil Ministry before taking a decision.
Oil firms lost about Rs 4,500 crore this fiscal on selling petrol below cost. The government does not compensate them for this loss as petrol is a decontrolled commodity.
The government continues to control rates of diesel, domestic LPG and kerosene which were sold way below cost to keep inflation under check. The oil firms lose Rs 16.16 per litre on diesel, Rs 32.59 a litre on kerosene and Rs 5d70.50 per 14.2-kg LPG cylinder.
The government makes up roughly half of the cost that retailers lose on selling diesel, domestic LPG and kerosene below cost.
IOC, BPCL and HPCL together are projected to lose about Rs 20,800 crore this fiscal on selling diesel, domestic LPG and kerosene.
I would like to suggest that Govt. of Goa should restrict the reduced price of petrol to Goa registered vehicles only, why should others benefit what was promised to Goan electorate. If there is petrol smuggling & petrol scam Parriker Govt. will be forced to abandon this exemption. The other states can follow the Goa example to reduce VAT on petrol. Let other states work hard to make up for this loss to Goa state exchequer.
Looks like Goa has become the new "Petrol" capital of India.Lets hope folk, from other neighbouring States realise that Goa does not have fields of "BLACK GOLD"(crude oil)...just plenty of illegally mined iron ore.
So What Is The Profit-Margin For Refining Crude Oil Into Gasoline?
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As of 1999, for every gallon of gasoline refined from crude oil, U.S. oil refiners made an average profit of 22.8 cents. By 2004, the profits jumped to 40.8 cents per gallon of gasoline refined. In the specialized California market where the gasoline must conform to the requirements of the California Air Resources Board, refinery margins were even higher. In fact, this helped Exxon, the largest company, report a profit (as of February 2008) of $40.6 billion. Nevertheless, one financial tracking institution reported that the profit-margins have now dropped to about 29.6 cents a gallon or around 60 percent lower than a year ago.
Generally speaking, since there are so many variables to consider, precise cost breakdowns are difficult to ascertain. According to the Energy Information Administration (EIA), however, which issues the “Official Energy Statistics from the U.S. Government” the average cost at the pump for a gallon of gasoline is broken down as follows:
74% - Cost of the crude oil
11% - Taxes
10% - Refining costs
5% - Distribution and marketing
In a simple illustration, let’s assume an oil company is paying $100 for a barrel (42 gallons) of basic crude oil. Their cost for a gallon will be about $2.38 ( 26 Rs a litre) . At a gasoline-pump price of $4.00 per gallon( 44 Rs per Litre ) ,,,, (, 44 cents has to pay for taxes and 20 cents for distribution and marketing expenses. This leaves $3.36 ( Rs. 37 per litre ) ...( for the oil companies. Out of that total they have to pay for the cost of the gallon of crude oil itself which was $2.38 and also the 40 cents to refine it into gasoline. This leaves $0.58 (rs 6.40 per litre) (profit per gallon of gasoline. As noted, however, depending on which report one looks at, this profit-margin can range anywhere between an estimated 30 to 60 cents per gallon ( Rs. 3.30 to 6.60 per litre) (.
Conclusion : Petrol price in India should not exceed Rs. 45/- per litre .....Centre is looting us ....
It is but natural that neighbours would be tempted to avail benefits of decrease in petrol rates in Goa. It is our pride to have CM like Mr. Parrikar heading Govt. of Goa who has shown practical guts in reducing VAT on petrol in keeping with his election promise. We suggest that Govt. of Goa restrict the reduced price of petrol to only Goa registered vehicles, which will in turn force the other states to reduce VAT on petrol also. Ultimately common man will be benefited.
Oil companies are crying for continuous losses. I'm attaching the link for the profit/loss of Indian Oil Cop. Ltd , it is showing continuously profit for last 5 yrs .
http://economictimes.indiatimes.com/indian-oil-corporation-ltd/profitandlose/companyid-11924.cms
IOCL has the handsome earnings. Now the questions arises why those companies are crying ? or Govt is asking those cos to cry, so govt can increase the price of petrol ? It is a big question mark .......