Tuesday, May 27, 2008

Rising fuel price

Here is a great analysis from Mr. Maulik Zaveri, which he posted at timesofindia.com.

From: Maulik Zaveri, Ahmedabad (Mobile:9898002186)
Why Rate per Ltr. of petrol is same for vehicle giving averae of 2,4 or 8 per ltr and 40,60 or 80 per Ltr?

Example:
If we take base Rs. 30/- per ltr of petrol and 40 Km. per Ltr. as standard then Vehcile giving average of 2, 4 or 8 Km. per ltr. are consuming 20, 10 or 5 times more that vehicle giving average of 40 per ltr.

So that if price for ltr. of petrol is Rs. 30/- for vehicle giving average of 40 Km. per liter then prices for vehicle giving average of 2, 4 or 8 per lt. will be Rs. 600/- (20*30), Rs. 300/- (10*30) and Rs. 150/- (5*30) per ltr. respectively.

Suppose Mr. X runs car having Avg. of 2Km/Ltr daily for 20 Km., he uses 10 Ltr petrol per day. If we take Rs. 30/- per ltr. of petrol and 40 Km per ltr. as a base his car is using 20 times more petrol than standard so he would be charged Rs. 600/- per ltr. of petrol (20* Rs.30/-). He has to pay Rs. 6000/- per day for use of 10 ltr. petrol in fact he is paying Rs. 300/- only so Rs. 5700/- per day is subsidy to him and for year Rs. 20,80,500/- (Rs. 5700*365. If their are 10000 users of car giving avg. of 2 km/ltr than subsidy to him is 2080,5000000 (Apprx. Rs. 2080/- Crore)!!!!!!.

1)Don't you think that at present governemt is giving subsidy to a purcahse of petrol whose vehicle are giving average of 2, 4 or 8 per Km
ltr. and burden of same is passing on the vehicle owner whose vehicle is giving averae of 40, 60 or 80 per ltr. ?

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