The Indian government on Thursday raised the prices of heavily subsidized diesel by as much as Rs 5 per liter. The per liter prices of diesel will now be at Rs 46.95 as compared to earlier rate of Rs 41.32.
The diesel price hike decision is not only receiving backlash from the opposition parties but also from the government’s own allies. It has been more than a year since the proposal of diesel price hike was kept on hold. This is the first time in the last 15 months when diesel prices have been raised.
However, the major automakers have welcomed the decision of diesel price hike. Speaking to PTI, Society of Indian Automobile Manufacturers (SIAM) Senior Director Sugato Sen said, "It is a good decision but the Rs. 5 per litre hike will hurt the consumer and market. We have been saying that diesel prices should be corrected in a staggered manner."
It is to be mentioned here that the government had kept diesel prices stable while raising the petrol prices continuously. The gap between diesel and petrol prices has widened-up significantly, which has caused a major shift of car buyers towards the diesel run cars. The latest move of diesel price hike is expected to give a push to the sales of petrol variants of cars.
Speaking to Reuters, Pawan Kumar Bansal, minister for parliamentary affairs, said, "Nobody wants to put pressure on people but the subsidy bill had risen so high that this became inevitable." He added, "This is an essential step to revive the economy and the investors' confidence."
