After negative reactions started pouring in, Society of Indian Automobile Manufacturers (SIAM) pleaded the government to reconsider the petrol price hike and revise the diesel price to maintain a fair parity.
SIAM Said: “SIAM requests the government to reconsider its proposal for such a steep increase in the price of petrol and to seriously consider the option of a moderate increase in the price of diesel before it impacts the growth of the industry”. In another statement, SIAM said that petroleum product pricing policy needs to be revised and the distortions should be corrected.
As we all know that the demands for petrol cars are falling everyday while customers are more interested in diesel cars. A statement says: “This is leading to a long chain of distortions, which will lead to sub-optimal use of resources (meant for petrol vehicles) unless appropriate market oriented policies are put in place”.
We have seen slowest growth in Indian Car Market in the month of April, 2012 at 3.4 per cent, which was slowest in past 10 years. The primary reason for this was the post-budget price hike panic along with high interest rates. This time it’s the fuel price hike, that is affecting especially middle-class two wheeler owners and small car owners.
“The need of the hour is to bite the bullet by reducing the price hike on petrol and revising the price of diesel, which will bring in more revenue to government as well as some level of parity between the two competing fuels for automotive industry” SIAM said.
News Source: Economic Times