Government of India has take the bold step finally which it has been talking about for a long time. For first time after October 2011 this is a major hike and after a long time this is a major hike of about 12%. The prices have been hiked very significantly by Rs. 5 per litre of Diesel. This change is going bring some balance to the ratio of diesel VS petrol car sales in India, but this change is going to increase the overall inflation in India. While this change is going to save lot of money for the the oil companies as they will get much more revenues with the high volumes of Diesel consumed each year in India, but this will impact the inflation in India on almost everything. In India, the major mode of road-transport for most of the goods are heavy vehicles which run on Diesel fuel. This will increase the price of almost all commodities which use Diesel run vehicles in transit as it will raise the transport costs. Also for the industries which consume diesel as fuel will also feel the burnt of this hike.
The Diesel prices after this hike which will be effective from September 14th 2012 in four metro cities as as follow:
- Price per litre of Diesel in New Delhi is Rs. 46.32 per litre up from Rs. 41.32
- Price per litre of Mumbai in New Delhi is Rs. 51.25 per litre up from Rs. 46.25
- Price per litre of Kolkata in New Delhi is Rs. 49.76 per litre up from Rs. 44.76
- Price per litre of Chennai in New Delhi is Rs. 48.91 per litre up from Rs. 43.91
Apart from the Diesel, the prices of LPG cylinders used in cooking will also see a hike in price. While the price of 6 cylinders per year will be subsidized (at Rs. 399 per cylinder), the usage of cylinders beyond 6 per year will cost at the market price which will be notified as per the market price determined by oil companies. The price of an LPG cylinder without subsidy will come out to be higher than Rs. 700 per cylinder.
Interestingly, the prices of petrol have not been changed at this time. In past many months, we have seen multiple petrol price hikes, but this is first major diesel price hike in a very long time. But besides this hike, the running cost of diesel cars compared to petrol cars of the same segment remains lower than that of petrol cars significantly. Will this increase the petrol cars sales in India compared to Diesel cars? Time will tell. We will keep you posted, stay tuned to Car Blog India for updates.