Petrol fuel duties to decrease, diesel cars to get increased taxes

The consumption of diesel by private vehicles has surpassed petrol earlier this year, and the petroleum ministry believes that the car owners are getting undue benefits of the subsidies offered for commercial use. The demand for the diesel cars has skyrocketed in the last year, as petrol prices have shot up after deregulation. The ministry wants to discourage usage of diesel cars and has come up with a proposal that might help curb the demand.

The petroleum ministry has proposed to slash excise duty on petrol, which will make the fuel cheaper. At the same time, it will impose additional taxes on diesel cars, making them more expensive. This will certainly reduce the running cost of petrol cars and increase the initial investment of diesels, and possibly encourage buyers to switch to petrol vehicles once again.

There have been many different ideas suggested by different government bodies in the past few months on the same issue. The auto industry is waiting for more clarity on the subject before they proceed with their long-term plans, and some concrete steps are expected from the government in the coming Union Budget.