Diesel prices deregulated, drop by Rs 3.37/litre

In a move that took a long time coming, the Government has finally deregulated diesel fuel in India. It has massive positive impact on the Indian economy and on a more individual level, a drop of Rs 3.37/litre right away. Diesel price in Delhi now stands at Rs 55.6/litre. Petrol price meanwhile is Rs 66.69/litre, with the difference between the two going up to over the Rs 10 per litre mark.

In the past eighteen months, since petrol prices were deregulated, cumulative drop in prices went to over Rs 7/litre, making it far more affordable to buy a petrol car than ever before. The dieselization of the auto industry was almost coming to an end when global crude prices began to drop. Not that deregulation directly results in drop in prices though. The economy is fortunate of global oil prices dropping in sync with the decision to deregulate diesel prices. Till now, the subsidized fuel created a huge dent in the government’s coffers but that has come to an end. Domestic prices will now be updated with any fluctuation in global prices. 

The price cut is the first for diesel since 2009. While this is good news for diesel passenger car owners in India, it is even better for the transportation sector. Commercial vehicle sales have been facing massive heat from the downturned economy and haven’t been able to turn around the tide yet despite the improving economic conditions in the past few months. Reducing diesel prices have a direct impact on running costs which in turn give the CV industry their best chance to turn things around.