Diesel cars may cost more as govt mulls duty hike

The proposal of hiking excise duty on diesel cars is again back on the government's agenda. The finance ministry is considering a proposal to hike duty on diesel cars to partly make up for the subsidy burden on the fuel.

Earlier there was a proposal for imposing higher taxes on diesel cars but the government had refrained from imposing it in the budget.

Despite a small cut in petrol prices last week, the gap between petrol and diesel has widened to nearly Rs 30, prompting more and more buyers to opt for diesel cars.

According to latest estimates, diesel cars and SUVs account for 60 per cent of the total personal vehicle sales in the country.

Around 15 per cent of the total diesel sales in India are consumed by diesel-powered vehicles.

Currently diesel cars attract excise duty between 12 per cent and 27 per cent, depending on the engine capacity and vehicle size.