The decisions have been taken and once again India sees a hike in fuel prices. Good news is that there are no further hikes in the petrol prices and bad news is, now diesel sees a Rs. 5 hike. The diesel prices will be effective from Thursday midnight, in other words, within a few hours. After the huge rise in petrol prices and now rise in diesel, the auto industry will be hard hit. This price hike is not appreciated by many political parties as well along with the common man because this would affect the prices of other industries and day to day commodities as well.
As we have constantly been reporting, this price hike has been due to the pressure on the state run oil companies who are incurring heavy loses. The government has been giving diesel, cooking gas and kerosene on subsidized rates which has put severe adverse effects on the public finances. Looking at all this, the government has also decided to cut excise duty on petrol by Rs. 5.3/litre, which will help balance the under-recoveries of Rs. 6/litre which the companies are suffering from currently.
With this decision the automobile association SIAM- Society of Indian Automobile Manufacturers, is a little relieved as they have been recommending balancing diesel and petrol prices instead of continuously raising the prices for petrol because the continuous hike in petrol was affecting the petrol car sales majorly and thus, distorting the chain.