Budget 2012: Segments Expected to Get a Hike
By siliconindia   |   Thursday, 16 February 2012, 00:46 IST   |    1 Comments
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Diesel and Petrol Price
Diesel and Petrol Price The fresh financial year starting April 1 seems to initiate on a gloomy note for car buyers, petrol car owners and the auto industry. Government proposes to impose higher taxes on diesel cars in the forthcoming Budget. The government requires hiking the taxes for automakers to compensate oil companies that have to keep diesel prices low, but automakers say they would favor a minor hike in diesel prices instead of a hike in taxes. The Planning Commission recommended an increase in diesel fuel prices by 0.75 a litre as a substitute to raising the excise duty on diesel cars. At present the excise duty on small cars is 10 percent, while on bigger cars it is 22 percent. Rising diesel prices by 75 paise will aid the government to recover at least 6,000-7,000 crore, which it strategizes to do by adding additional excise duty of about 80,000 on diesel-run cars. Diesel cars now account for nearly 40 percent of car sales compared with less than 20 percent a few years ago, mainly because of growing gap between the prices of diesel and petrol. Petrol prices are expected to see a rise by about 3 per litre early next month after the Assembly elections of Uttar Pradesh. The car industry is in a general growth slowdown and more hikes in petrol prices will only serve to heighten the negative sentiment. Look forward to notice automakers introducing more and more cars powered by cheaper and low emission fuels like CNG and LPG across their model range.

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