Latest Car News in India

Friday, January 27, 2012

By Shilpa Chopra

Diesel car prices hike imminent

Diesel cars in India could be dearer by Rs 80,000-Rs1,60,000 if the new tax on such cars comes into force. The Centre for Science and Environment (CSE) has reportedly submitted a proposal to be considered in the upcoming budget stating that the diesel cars buyers should be given the benefits of subsidy on diesel. Since diesel is priced less than petrol, thus in order to put a check on increasing preference for diesel cars, the taxes on diesel cars should be increased to balance consumption of the subsidized diesel in the country, the report reportedly suggests.

Interestingly, there has been a striking increase in the demand for diesel cars in India after the petrol price shot up lately. More and more car makers such as Chevrolet, Nissan have pitched in their diesel car avatars in India while some preferred to have the diesel model only. Following the rise in petrol prices, Chevrolet Beat Diesel and Nissan Micra sales picked up besides Maruti Sift and Maruti Swift Dzire.

As per an estimate, out of total number of cars sold in India, diesel cars account for 40 percent of it and as the price of diesel is lower than petrol, people prefer diesel car than petrol driven cars. Besides this there has been a sale of more higher cubic capacity diesel engine thus signaling that the consumption of diesel by cars will shoot up.

However, critics say that increasing tax on diesel cars is not a solution to bridge the gap in the price of petrol and diesel. Prior to increasing the price of diesel cars in India, there has been discussion to increase the price of diesel for cars. However, following the resentment and issues of severe blackmarketing the decision could not reach execution.

Since diesel is primarily used in agriculture and then in transportation sector, raising the diesel price will attract jeopardizing the transport system as well as it will have negative impact on the agri sector. Thus the government is devising an effective strategy to combat the rising consumption of diesel by cars in India.  

Since diesel is primarily used in agriculture and then in transportation sector, raising the diesel price will attract jeopardizing the transport system as well as it will have negative impact on the agri sector. Thus the government is devising an effective strategy to combat the rising consumption of diesel by cars in India.

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