Saturday, June 21, 2008

Fuel Prices: Part 1.5

A follow up to the earlier post.

I showed the post to my father who commented on an error in the post, which was identified again by my good friend Vatsan, and here is what he wrote; and what sums up the error; and my response

And yes; there will be another, more detailed and accurate analysis of fuel prices in the (near (hopefully)) future

Anonymous Vatsan said...

dude, there is a mistake in your analysis of the prices.
even though you can get only 46% petrol from crude, that doesnt multiply the price of petrol by 1/0.46, because there are other components of crude that have monetary value.
these may of lower or of higher monetary value. and this could even give an error in the range of +50% (or more, or less. depending on the value of these other commodities obtained from crude) in the price of petrol.
and you also havent factored in the price of the fractional distillation and the refining. which would increase the price by a bit.
but, i do think that it is safe to say that all factors included, the price of a litre of petrol, without subsidies and duties, would be a sizeable amount lesser than 76 INR.

June 21, 2008 11:00 PM

Blogger Avi C said...

@ Vatsan; you're the second person after my dad to point this out to me. Yes; what you say is right. Absolutely correct. In fact, I was planning to write a new blog entry explaining my error.

I could say that I've chosen a worst case scenario, but then again, I haven't included the refining costs, etc.

I did look up the actual price and saw it mentioned somewhere and it was about Rs.71/L , which is about 5 rupees away from my estimate.

A best case scenario, on the other hand would be about 76*.46 (assuming all the crude is refined into petroleum and there are NO extra costs involved), which is about Rs.35 but that, obviously isn't the case. That said, I am planning on a blog entry with more variables involved.

June 22, 2008 12:08 AM

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