The ever-increasing petrol prices and the steady subsidised diesel rates have made diesel cars a hot favourite among new car buyers. Of every 100 new cars sold, hardly 30 are petrol cars which was the other way round about three years ago. Back then, if you covered about 20,000km in a year, you could recover the price premium that you paid for buying a diesel. Now, the figure has come down to less than 10,000km a year due to the huge price disparity. Running a diesel car (at about Rs 2.5 per km) is less than half as expensive as running a petrol car.
Car manufacturers in India are already charging a hefty premium on diesel cars and at the same time denying it by saying that they are selling petrol cars cheaper than the market-price due to the slack in demand. The demand for diesel cars will certainly increase, so there is an opportunity to recover the discounts they are offering on petrol variants from the diesel buyers. The depreciating rupee is also adding to the price hike of diesel cars as manufacturers like Hyundai, Toyota, and Ford import diesel engines. The added costs will most certainly be passed on to the consumer.
The government needs to deregulate diesel prices at the earliest but is not able to do the same owing to political pressures and apprehensions of sky-high inflation and public uproar. To generate revenues, the government is planning to hike the taxation on diesel cars by another 2 to 5 per cent. This will make buying a cheap economical car a mere dream for the common man, the person who owns a motorcycle and would like to upgrade.
The further price hike of diesel cars may result in further slowing down of car sales in India as seen in the last couple of months - petrol cars will not sell and people will not be able to buy the high-priced diesels as car finance is not cheap. What this could lead to is the conversion of used petrol cars to CNG or LPG and a huge spike in demand for used diesel cars that will inflate the used car market. So, if you want to buy a diesel car, better buy it now.
