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Oil Companies Seek Rs.2 Petrol Price Hike
Petrol is the only fuel whose price is currently not being regulated by the government. Diesel remains a subsidized fuel which has kept its price significantly lower than petrol. In some countries in Europe, petrol and diesel prices are very much similar. This has ensured there is a balance in demand for both diesel and petrol cars.
In India however, diesel is at least Rs.30 cheaper than petrol. Further, the fuel economy of diesel cars is better than petrol cars. This has lead to a sudden increase in demand for diesel cars. Carmakers who plan their production schedules years in advance were forced to modify them to increase production of diesel cars.
Another increase in petrol prices will have a severe impact on car sales. Car sales in October, a period that usually seas a spurt in sales has been very dull. Several carmakers have reported a drop in sales. It is quite evident the models that saw a steep drop in sales were all petrol powered. Carmakers need to prepare themselves for a bleak future for their petrol cars if there is another hike in petrol prices.
Hindustan Petroleum Corporation's director of finance B. Mukherjee has stated to the media that the company was losing Rs.1.50 for every litre of petrol sold. Further crude oil prices have also increased due to the crisis in Libya.
The government is expected to take a call on petrol prices soon and a price hike appears imminent. If I was you, I would head to a petrol bunk soon and fill my tank before I am forced to shell out another Rs.2 for a litre of petrol.
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