Diesel prices have gone up by Rs. 0.45 (45 paisa) with effect from today; 18 January, Friday. This may sound like a negligible hike but the price of diesel will be hiked regularly from now on. Indian Oil which is a state run oil company and also India’s largest fuel retailer in terms of sales decided on the price hike on Thursday (17 January).
Indian Oil said that it would increase the prices of diesel by 45 paisa today after getting the nod from the government. Such changes in the price of diesel will now be more commonplace and the price of diesel sold to bulk buyers will now be increased by Rs.9.25 per litre.
The hike in diesel prices has been expected for long but was constantly delayed as it affects not only the average car buyer but also other essential modes of transportation like trains and trucks. This hike coupled with the many more to come will result in a slowdown in the demand for petrol cars. However, car manufacturers welcome this move as they believe this will be good in the long run. Also read: Analysis: Will diesel cars still make sense after diesel price rises?
The increase in prices of diesel will have a direct impact on the price of essential consumer goods as the cost of transporting them will now be higher. After the recurring hike in prices of petrol, the demand for diesel cars in India had gone up and the demand for petrol vehicles saw a slump. The hike will also play a pivotal role in increasing the demand for petrol cars, especially in the small car segment. In order to bridge the huge gap between petrol and diesel prices Indian Oil will also reduce the price of gasoline by 0.25 paisa; also effective today. Also read: Why hiking taxes on diesel cars is not the best solution
So far, the price of petrol was deregulated, while the prices of diesel and cooking gas were controlled by the government as these two fuels affect a large section of society. Therefore, Bharat Petroleum, Hindustan Petroleum and Indian Oil, all sell fuel at discounted prices to the public in lieu of which the federal government compensates them. This hike may come as sad news for those who have recently purchased diesel cars but is a move in the right direction for the larger good. We can also expect the subsequent hikes in the price of diesel to be higher than the recent 45 paisa hike. Also read: Do you need to use premium diesel for your car?