We really saw it coming! Remember we earlier reported that the Indian govt. plans to gradually increase the price of diesel? Well, the govt. has now de-regularized the price of the stickier fuel partially.
As planned earlier, state owned oil marketing companies like Indian Oil, Bharat Petroleum and Hindustan Petroleum are now allowed to revise prices of diesel fuel periodically. However, the govt. will surely have a say over the hike in price.
As we earlier reported, an increase in the price of diesel by INR 1 per litre every month over the next 10 months has been planned. This will be done to minimize the losses of state owned oil companies. These companies easily lose 9 to 10 rupees per liter of diesel sold in India and this means that the govt. subsidizes the oil marketing companies to the tune of several thousand crore rupees every year. This causes a financial deflect and affects the overall economy.
It will be interesting to see how auto makers will react in case diesel becomes considerably more expensive in the country. Well, suddenly the future of diesel cars isn’t looking all that bright.