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Just four months after the previous hike of petrol prices, it’s time to gear up for another hike. Petrol prices are expected to go up by as much as Rs 3. This time the hike in prices is due to the falling value of the Rupee against the Dollar which affects the price of crude oil. The Rupee fell to 48 per Dollar which is the lowest since September 2009. Also Read - Coronavirus in India: Another COVID-19 Patient Dies in Maharashtra, Death Toll in State Rises to 21 | Highlights
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Major oil retailers like BPCL, IOC and HPCL are losing Rs 2.61 per litre of petrol which adds up to Rs 15 crore per day. The total loss in this fiscal has come up to Rs 2,450 crore. The three major oil companies had hiked the prices of petrol in May by Rs 5 per litre which has led to a huge domino effect leading to increased prices of cars and important components in the automobile industry.
Although diesel adds to the losses incurred, a price hike for diesel has not been hinted at yet. On the other hand the government is campaigning against taking the subsidy off diesel for car owners who enjoy the lower prices meant for the road transport industry.
While the government’s decision is still unclear regarding the pricing of diesel and its desire to abolish the subsidy for car owners one way or another, manufacturers like Maruti Suzuki, Hyundai, Toyota and Mercedes are in a fix with regards to the investments towards diesel engine technology in India. While most manufacturers are making the most of the high petrol prices to sell their diesel cars, the price difference between petrol and diesel has lead to a great increase in the market share of diesel cars sold and auto companies are planning on spending a lot more on diesel technologies. But if the government decides to waive off the subsidy, the sale of diesel cars will fall, throwing a spanner in the works of the manufacturers’ R&D efforts. For now, it’s wait and watch.