Next time you go to buy a diesel car you might end up paying 2.55 lakh more. Seems unbelievable right?? But unfortunately you heard it right, it is 2.55 lakh. This could be true for medium and large diesel vehicle like the sedans and SUVs. The small diesel cars too will cost Rs 1.7 lakhs more. This could become a reality if the finance ministry accepts the proposal of the Oil Ministry. The Oil Ministry has asked the finance ministry to impose additional excise duty on diesel cars. This apparently is a move to check the dieselisation of the economy, triggered by gap between the petrol and diesel prices.
Diesel cars are more fuel efficient than petrol and offer 30% more mileage. Add to this a price difference of around 25 Rupees between the diesel and petrol and it is quite clear why Indian buyers prefer diesel vehicles. Presently a diesel car costs around 1 lakh to 1.5 lakh more than the petrol but the diesel still sells like hot cakes because the buyers believe that the high price will be offset by the low running cost and high resale value of diesel cars. Diesel cars constituted 55% of total sales in May 2012 this despite most small cars, which sell in large numbers being available only in petrol. The bias towards the diesel is evident when you take a look at the sales figures of cars like the Suzuki Swift and the Chevrolet Beat. 80% of the bookings received for these cars are for the diesel variants.
If this move of price hike becomes a reality then it could spell doom on some car companies which heavily depend on its diesel cars. Small diesel car are under the fear of being shunted out of the market because the diesel variants will cost around 3 lakh more than the petrol Variants and will be out of reach for most buyers. Overall too, most car makers will suffer as most of them have invested Crores of Rupees in the last few years on getting their diesel cars to India. All eyes are on the Finance Ministry now.
