Thursday, 7 June 2012

Finance minister Pranab Mukherjee asks for production and sales data from auto makers before decision on excise hike of diesel cars



Honorable Finance Minister Mr. Pranab Mukherjee has asked for the production and Sales related figures from the auto makers before he finalizes a call on the excise duty on the diesel cars. Unable to raise diesel prices due to political compulsions, the finance ministry is looking to raise excise duty on diesel cars to discourage consumption of this subsidized fuel by personal vehicle owners.

"We have asked the automakers for data related to production of diesel cars. They will come back within a week and then we will decide," a ministry official told reporters after a meeting with the leading automakers.

Diesel is almost 40% cheaper than petrol, resulting in most buyers opting for diesel cars even though they cost more than petrol ones.

Diesel car sales rose 35% in the last financial year while petrol car sales dropped 15%. Auto industry favours an increase in prices of diesel but not higher excise duty on diesel cars, arguing it would induce distortions.

Oil companies are mandated to sell diesel at government-controlled price that they say imposes 13 per litre loss on them.


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