'Petrol price cuts a boost for less polluting cars'

Last Updated 31 August 2014, 12:54 IST

The narrowing gap between petrol and diesel prices will hopefully push people towards less polluting petrol-run cars, citizens in the national capital say.

"The multiple petrol price cuts this month are a big relief for us middle class car-owners, especially now with prices going so high," Rajnish Garg, a Delhi resident, told IANS Sunday.

"With the price difference (between petrol and diesel) going down, hopefully more people will move to petrol-engine cars," Garg added.

With international crude oil rates dropping to around $100 a barrel, petrol prices have been cut by a further Rs.1.51 a litre excluding local taxes.

Diesel rates were, however, hiked by 50 paise a litre, in line with the January 2013 decision to hike diesel prices till under-recoveries, or losses, on sale of the fuel below cost are wiped out.

Thus, the difference between both fuels has dropped to less than Rs.10 per litre in the three metros, except Kolkata where petrol continues to be costlier by around Rs.12.

"This narrowing of price difference means that the government subsidizing of rich diesel-car owners, who anyway cause more pollution, will end in some time," Gurinder Singh, another Delhi resident, told IANS.

"The government cutting down diesel subsidies will help it control fiscal deficit," he added.

Diesel is around 14 percent costlier now than a year back, while in the run-up to the festival season the auto market has shown signs of a shift towards petrol variants after two years, boosted by falling petrol prices.

When Honda Cars launched its Amaze model in India last year, it found 80 percent of customers going for the diesel sedan, which figure had dropped to 50 percent last month.

Maruti Suzuki is reported to have shelved plans for a new diesel engine plant in Gurgaon, with diesel car sales having declined seven percent, while sales of its petrol cars have grown by nearly 11 percent in the past few months.

(Published 31 August 2014, 12:54 IST)

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