For the first time in seven years, oil companies in India are planning to cut diesel prices owing to global drop of global crude price to below $100 a barrel. It is expected that the company’s will review the prices on September 15. But the decision regarding diesel price cut will be taken by Government of India. Unlike petrol, the diesel is a regulated fuel.
Moreover, the rupee value is marginally increased against the dollar, which again helps the OMCs to offer price cut on diesel. The company reviews petrol prices change on the 15th and 30th of every month while the diesel prices have been raised by 50 paisa very month since January 2013.
With a regular increase in diesel prices, the demand for diesel cars has gone slightly down. Buyers again inclined towards petrol driven cars. Moreover, the narrowing petrol and diesel prices have forced manufacturers to revise their strategies. Few car makers have already put their plans on hold about adding diesel cars. Moreover, the country’s largest car manufacturer, MSI, has shelved its diesel engine capacity expansion plan. Currently, MSI is working on a smaller 800cc diesel motor which will power the Celerio and Wagon R.