The recent proposal of oil ministry of levying special duties on the diesel run cars is expected to raise the price of such cars by up to Rs 2.55 lakhs. The government of India is planning to levy additional duties of 1.7 lakh on small diesel run cars like compact hatchbacks and Rs 2,55,000 on medium and large diesel vehicles such as sports utility vehicles and sedans.
In a recent statement given on proposal of diesel vehicle price hike, a government official said, "The oil ministry has asked the finance ministry to impose additional excise duty on diesel cars and the matter is under consideration."
The demand for diesel run cars has shot upwards in the recent years in the Indian market due to continuously widening gap between prices of petrol and diesel. With diesel prices not witnessing any hike since almost a year, it has become approximately 74 percent cheaper as compared to the petrol.
Speaking on this proposal, Mr. S Nakanishi, managing director, Maruti Suzuki said, "Sale of new cars is already slowing. We have cut production of our petrol models in tandem with the changing market dynamics, and any tax on diesel cars would further taper off demand."
