Petrol run vehicles have been seeing decreased demand following continual rises in petrol prices since the past year. However, there is some news that is bound to put petrol vehicles back in their original place if the new proposal to increase excise duties on diesel cars finds favor in the 2012-13 budget.
Before the budget, there is bound to be increased demand for diesel vehicles while petrol car sales are in for further drop in demand. However, come April and approval of new diesel policy will see petrol vehicles back in its rightful place.
Prices of diesel cars are higher by 16 to 25% as compared to petrol cars of same model despite the fact that manufacturing costs are not much different between the two variants. Diesel car sales will decrease and that of petrol vehicles are sure to rise following the passing of this proposal.
A number of companies are planning huge investments into manufacture of diesel engines. Government policies should be clear-cut as these investments are for 30 year periods and hence companies have stalled or deferred their investment plans till such details are clear.