There is expected to be a major shift in production to petrol power from diesel among OEMs of passenger cars. A report from India Ratings and Research suggests that this move has been fuelled by a variety of factors affecting the image of diesel fuel.
It suggests that consumer perception has been influenced by fall in the difference of prices, emission issues and oddly enough the ban on the registration of diesel vehicles in the NCR. The prices of both fuels (average decline of 21 per cent in petrol and 30 per cent in diesel) have fallen in the last one year due to the decline in global crude prices. The prices of petrol vehicles are also on an average Rs 75 lakh to Rs 1 lakh cheaper than their diesel counterparts.
This is a major change compared to six years ago when the Centre decentralised the price of petrol. It led to a tilt in sales towards diesel cars from FY2011. In FY2014 and FY2015, sale volumes of diesel cars in the country had overtaken those of petrol vehicles. However, in the current financial year, petrol cars have begun to outsell diesel vehicles (despite diesel prices being decontrolled in Oct 2014), due to the softening of global crude prices leading to a drop in prices of both fuels.