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# Petrol, Diesal And Dollar

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Relationship among three

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### Petrol, Diesal And Dollar

1. 1. Petrol, diesal and dollar By Prof.Augustin Amaladas M.Com., AICWA., PGDFM.,B.Ed.
2. 2. History <ul><li>#Crude oil cost in July to August 2008-\$140 range </li></ul><ul><li>#1US dollar was equal to Rs.42(Approximately) </li></ul><ul><li>#1 barrel crude Oil = 190 litres. </li></ul><ul><li># with 1 barrel of crude oil companies can produce 28-29 litres of petrol and 85 litres of diesal(Approximately) </li></ul><ul><li>Normal loss =190-29-85 =76 litres </li></ul>
3. 3. Calculation in Indian Rupee <ul><li>1 barrel costed the country in August Rs.5880 (\$140 x Rs.42) </li></ul><ul><li>Refinery charges etc. </li></ul><ul><li>1 litre of petrol costs about Rs.11 and diesel Rs.13. </li></ul>
4. 4. New market trends <ul><li>December 2008 price-\$38 per barrel </li></ul><ul><li>1\$ = Rs.50 </li></ul><ul><li>Total costs =Rs.1900 </li></ul><ul><li>Share of costs based on current sale value </li></ul><ul><li>50 x 28 :35 x85 1400:2975 </li></ul><ul><li>Petrol costs Rs.608 and diesel costs Rs.1292 </li></ul><ul><li>Cost per litre of petrol Rs.21.71; diesel Rs.15.2 </li></ul><ul><li>Levis on petrol and margin of dealer (50%) Rs.10.85 and on diesel Rs.7.6 per litre </li></ul>
5. 5. Price can be fixed by government <ul><li>Petrol Rs.21.71 + Rs.10.85=Rs.32.56 </li></ul><ul><li>Diesel Rs.15.2 +Rs.7.6=Rs.22.8 </li></ul><ul><li>Why government is reluctant to fix at this price? </li></ul>
6. 6. Reasons <ul><li>1. When economy is not doing well according to Keyn’s theory the Government has to spend on infra structure so that it can revive the economy. In order to spend government require money. All the industries are not working well. Income from such sources are already reduced.If collection from petrol and diesel are reduced the inflow of cash to government will be reduced. </li></ul>