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Petrol price rise to dampen car sales, Maruti, Hyundai Honda in a tizzy

It seems that the petrol price hike is going to increase the burden on the already laden Indian masses. Besides, the slide in sales of petrol cars such as Maruti Alto, Hyundai Eon as well as Honda cars which are offered in petrol only models will receive a severe jolt. As per the reports, the petrol price has been hiked by 70 paisa per litre from today. This is the second rise in less than three months. However, after the mammoth increase of Rs 7.50 per litre, the oil companies decreased the price by Rs 2.02 per litre on June 3 and Rs 2.46 a litre on June 29. Thus the effective increase remained at Rs 3.06 per litre. Now that 70 paisa has been increased, the increase in the last three months has been Rs 3.76 per litre.

Notably, India’s largest oil company – Indian Oil Corporations has increased the price of petrol and other oil companies are expected to follow suit. The reason for the price hike has been quoted to be the increase in crude prices internationally as well as the falling rupee value. However, car industry critics have severely censured this move and have questioned that why the oil companies have not decreased the petrol prices when crude was at incredibly low prices recently. Meanwhile, long queues were seen at petrol stations on July 24 after the reports flashed.

Meanwhile, car critics have termed the fresh petrol price rise to be further dampening the growth. Since over 65 percent of the cars sold in India are petrol cars and that too mostly entry level small cars, the petrol price hike will desist the car buyer and this will pull down car sales growth. Maruti India which is the largest petrol car producer followed by Hyundai and Honda India will be most affected due to the price rise.