Auto stocks down on hike in excise duties on diesel cars

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Auto stocks down on hike in excise duties on diesel cars
Tata Motors: Quotes, News
BSE 380.70BSE Quote4.35 (1.14%)
NSE 380.40NSE Quote4.9 (1.29%)
Maruti Suzuki India: Quotes, News
BSE 7620.05BSE Quote13.25 (0.17%)
NSE 7598.80NSE Quote16.35 (0.22%)
Auto stocks dropped on Wednesday on reports of a hike in excise duty on diesel cars. The stocks of the Tata Motors was down 1.07%, M&M lower by 1.48% and Maruti Suzuki was lower by 2.95% on BSE at 10.50 am IST.

On Tuesday, Oil Minister S Jaipal Reddy had written to Finance Minister demanding a hike in excise duty on diesel cars. This hike is to make up for subsidised fuel being used in vehicles.

According to Oil Ministry estimates, 15% of diesel consumption is accounted for by personal cars and SUVs, reports PTI.

Increasing demand for diesel is a growing concern for the country, dealing with high current account deficit and high inflation worries.

According to the reports, there is a sharp increase in diesel consumption when compared to petrol due to the large subsidy on diesel in the last one year. He said adding the subsidy on diesel alone is expected to increase from Rs 81,192 crore in 2011-12 to over Rs 100,000 crore in 2012-13 at current prices.

Diesel is the most consumed fuel in the country but is sold at a discount to its imported cost. However, car sales in the country rose only 3% in the month of May, the slowest in seven months due to the interest rates and petrol price rise.

Story first published: Wednesday, June 13, 2012, 11:02 [IST]
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