The country’s most favourite fuel – Diesel, could see a drop in price by Rs. 3.56/litre in the near future and can be considered as a Diwali gift from the Modi government. The primary factor behind this welcome change, is the significant reduction in international crude oil prices. Oil giants like Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited and Indian Oil Corporation are currently reaping the rewards of this dip in crude oil prices as the cost of prodction and import of this precious resource has gone down. Earning Rs. 3.56/litre for every litre sold, these companies will soon have to cut diesel prices, which in-turn, will benefit millions across the subcontinent.
It’s not just diesel that will see a price drop. Petrol too will take a shave on pricing. Due to the reduction in oil taxation, the government of India recently reduced the price of petrol by Rs. 1/litre at all petrol bunks. Combined with the reduction in taxes, petrol prices in Delhi went down by Rs. 1.21/litre. This drop in crude oil prices plus lower taxation means that when the government reduces the cost of diesel by Rs. 3.56/litre, the actual consumer-end reduction could be as much as Rs. 4.20/litre. Now that’s quite a juicy proposition for everyone, the consumers and automobile manufacturers. This cost reduction will definitely affect the automobile industry in a positive sense as more people will now consider buying cars, since their daily running costs will be much lower than before.
In the current scenario where we all have witnessed constant hike in diesel prices for the past year or so, petrol-powered cars began selling well as this fuel did not see a very volatile price change. All of this entirely depends on the global crude oil rates, predicting which is more difficult than walking on a rope. But, since the cost of diesel kept roping higher and higher, most car buyers in India started tilting back towards lady petrol and the cars that are powered by it. Now that diesel is to see a price plunge, India car buyers will once gain be swayed towards this oil. Who said automobile industry is easy to predict? It’s said that, as a rule of thumb, if you will be driving over 1,000 km per month, it will be wiser to go for a diesel car. And if it’s less than 1,000 km per month, go for petrol power.
Source – Financial Express