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Diesel Price Might Increase By Rs. 10/-
The reports on the diesel price hike say prices will increase by one rupee every month. The price hike is being pushed for by state run oil companies who claim they loose Rs. 9.28 for every litre of diesel they sell. To add to the hike in diesel prices, reports say the government is also planning to hike kerosene price by Rs. 10/-
The government had increased diesel prices by Rs. 5/- in September 2012. The new price hike is expected to have a major impact on the auto industry. Although carmakers have been happy selling increasing numbers of diesel cars, they have also said it would not be sustainable to sell more diesel cars in the future. In fact they will welcome the government's decision to increase diesel prices as it will help them clear stagnant stocks of petrol cars.
If the Indian government does increase diesel prices, carmakers will also need to look in to the huge investments they have made in increasing production capacities of diesel cars and engines. Nearly every carmaker in India has made investments to increase diesel car capacities.
While the diesel price hike is both a boon and bane for the carmakers, it is the car buyer who will be hurt the most. Existing diesel car owners will have to increase their monthly travel budgets. People who buy diesel cars after the price hike might might benefit if demand comes down.
Petrol car owners on the other hand will see a silver lining in the diesel price hike as the resale value of their cars will increase. If you are planning to buy a petrol car, then the best time to buy a petrol car is probably now as any discounts on petrol cars will vanish once demand starts picking up.
Source: 4traders.com
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