The Rs. 2.45/litre cut in petrol prices has been cheered by carmakers; ask for more price cuts to reduce price difference between petrol and diesel
The automobile industry today said the petrol price cut is a step in the positive direction for the sector that is struggling with a demand slump, but asked for more such moves to reduce the difference with diesel.
"It is a very good step for the auto industry. We need much more such steps to reduce the price differential between petrol and diesel," Society of Indian Automobile Manufacturers (SIAM) Senior Director Sugato Sen told.
Expressing similar sentiments, Honda Siel Cars India Senior Vice President (Sales and Marketing) Jnaneswar Sen said the move is in a positive direction.
"However, it is still not enough to have a level playing field between petrol and diesel vehicles as the gap in the prices between the two fuels is very high," he added.
A senior Maruti Suzuki India official said any reduction in fuel price is a positive development as it reduces the cost of running, leading to a positive sentiment in the market.
"However, this only partially offsets the previous big hike," he added.
In a relief to inflation-battered common man, petrol price was today cut by Rs 2.46 per litre, the second reduction this month. The reduction in rates follows a Rs 2.02 a litre cut in prices from June 3.
The two price cuts have wiped out more than half of the massive Rs 7.54 per litre increase in rates, the biggest in the history, affected last month.
The automobile industry has been reeling under a demand slump as petrol vehicles found lesser buyers due to the high price of the fuel with more and more consumers opting for diesel vehicles.
Car sales in India grew at the slowest pace in seven months during May with SIAM reporting 2.78 per cent growth as high interest rates and petrol prices hit the market.
With vehicle sales continuing to dwindle, many automobile firms, including Maruti Suzuki, General Motors, Tata Motors and Fiat, in India are shutting down their plants temporarily to reduce inventories.