Latest Car News in India

Friday, January 18, 2013

By Pawan Rana

Deregulation of diesel prices; hike might occur soon

Sad news for all diesel vehicle owners! There are high possibilities that diesel prices could be hiked in next couple of weeks. There could be an increase of up to Rs. 10 in next ten months. Right now, the oil companies here are not earning much, but in fact bearing a loss of around Rs. 9 to 10 per litre on diesel. So, the government has gone for deregulation, to be exact a partial deregulation. This means that the Indian government will have a say over the price hike of diesel if the oil companies like Bharat Petroleum, Hindustan Petroleum and Indian Oil decide to raise prices of diesel anytime.

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The major reason behind partial regulation of diesel prices is that it would facilitate in averting the augmented fiscal deficit that are harming the country’s finances. It is pretty obvious that if the diesel prices are raised, then it will have a fairly bad effect on the diesel car sales. Right now, the demand for diesel cars is keeping the Indian car market’s pace, if diesel gets costly, the growth of the Indian market will further become slothful and slower.

In last couple of years, there has been a major shift in demand from petrol to diesel. Cars like Renault Duster, Maruti Swift, Hyundai i10, and more are offered with diesel engine option. hence, if the diesel prices rise, then the shift will happen again and this time there are changes that people will give more preference to petrol cars, as the initial cost of diesel cars is already high and after that paying high diesel prices doesn’t make any sense.

Let’s see, what price fluctuation will happen in diesel. However, it would be best if instead of hike, the prices remain constant.

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