Diesel Price Hike; Car Sales To Slump Further

Published: Saturday, July 14, 2012, 16:12 [IST]

With another fuel price hike on cards, the most worried are carmakers in the country. Reports are that government is planning to increase the price of diesel by around Rs 5 in July end.

Car sales in the country have already been down due to high fuel prices and increased interest rates. With the new fuel price hike, carmakers are in real trouble as they are not being able to set a strategy due to unstable government policies.

A government official was quoted as saying: "Diesel price hike is inevitable but I can't give you a date. There is a need to boost the economy by raising fuel prices but it would happen in a politically suitable time. Nobody sacrifices the government at the altar of economic policies."

There have already been hues and cries from different corners over decontrolling the price of diesel. Carmakers like Maruti Suzuki had increased production of diesel cars due to high demand. Now, with another diesel price hike, it seems like car sales are going to be hit further.