After Fuel Price Hike in Union Budget, Embrace for Pricier Fuel in BS-VI Regime

The month of April next year will mark the implementation of BS-VI emission norms across the country. While this will indeed mean a lot of changes in the market and the prices of the vehicles are sure to go up, there is another glaring implication of the new BS-VI emission norms as the mandatory rules are all set to push the prices of petrol in the market upwards. Some reports state that the hike in petrol prices could be as high as Rs 2 per litre. As of now, the fuel pumps across nation are selling BS-IV fuel in the market but the onset of April 1, 2020 deadline will mean that the fuel pumps across the nation will start selling BS-VI fuel in the market.

The fuel retailers across the nation have already invested heavily in upgrading the machinery at their end to produce BS-VI grade fuel and the companies are now looking at passing on these prices to customers now. As the matter stands, the fuel prices have already been hiked all over the country in the recent budget presented by the government. The price of the petrol was increased by Rs 2.5 per litre while the diesel prices went up by Rs 2.3 litre/litre. As of now, BS-VI fuel is supplied to areas around Delhi-NCR only and the auto industry has already requested the retailers to stock up on BS-VI fuel well ahead in advance of the April 1, 2020 deadline.

The public is already facing a hike in fuel prices post the Union budget was announced, and to top that the auto industry in India is going through a long period of sales slump. With the BS-VI emission norms already promising to make both petrol as well as diesel cars expensive in the market, and impending rise in BS-VI fuel, the customers are in for a double whammy. Not to say that the makers will also have challenges of their own when it comes to sales.

Perhaps this is the reason that some makers like Maruti Suzuki have already announced that they will stop the production of diesel engine cars in the market, at least initially. What is to be taken note of here is that the prices for diesel cars will rise by a higher margin as the process of upgrading the exiting diesel engines to BS-VI norms involves a lot of expense at the end of the maker which is in part then passed on to the customer.