Fuel price hike takes away speed from SUVs; growth of domestic sales slows

Domestic sales growth fall to a single digit after two years.

Sports Utility Vehicles (SUVs) have been the flavour of the Indian car market for the last couple of years. They grew at a strong double-digit and were the fastest growing segment in the domestic passenger vehicle (cars, utility vehicles and vans) market for the last two years. Things are no longer the same. UVs or utility vehicles are now the slowest growing segment of the PV market, visibly impacted by a sharp surge in fuel prices. Most of the UVs run on diesel where the price hike has been sharper to petrol.

In the first half (H1) of the financial year 2019, UVs have grown by just 5.4 per cent compared to 6.8 per cent growth in cars and 14.5 per cent growth in vans. In the comparable period of FY18, SUV had surged 18 per cent while cars and vans had grown at 6.6 and 2.5 per cent, respectively. SUVs and multi-purpose vehicles (MPV) are the two sub-segments of UVs. The emergence of more affordable compact SUVs in recent years helped expand the total UV market.

A total of 1.16 million cars have been sold in the domestic market during H1. The volume of UVs, the second biggest sub-segment of the PV market, stood at 464,419 units. A total of 110,389 vans were sold in the same period.

“When fuel prices rise the SUVs are impacted. People were upgrading from hatches to compact SUV but these buyers now realise that fuel price is an issue. Compact SUV segment is seeing a muted growth now,” said Mayank Pareek, president of passenger vehicle business at Tata Motors.

Petrol price has climbed more than 18 per cent since January this year to Rs 82.72 per litre in the capital. However, the price increase in diesel has been steeper at 26 per cent to Rs 75.38 litre. About 84 per cent of the current UV sales are in diesel variants and therefore the impact on driving cost of these vehicles is higher than the petrol run cars. In cars, only 23 per cent of sales are in diesel variants.

Take the case of Maruti Suzuki Vitara Brezza, the most sold SUV in domestic market. Brezza’s sales expanded six per cent to 64,612 units in April-August period of FY19. In April-August of FY18, the volume had surged 47 per cent to 60,960 units.

The company said Brezza continues to grow at a healthy pace even on a large base of last year. “Maruti Suzuki’s foray into the popular UV segment began with Vitara Brezza and S-Cross. These products created disruption in the compact SUV market. Vitara Brezza continues to be the most loved SUV despite several new entrants into the segment. The testimony to it is the double-digit growth in its average monthly sales in consecutive years,” said R S Kalsi, senior executive director (Marketing and Sales) at Maruti Suzuki.

Mahindra & Mahindra, which gets bulk of its PV sales in SUVs, has seen a flat performance in domestic sales during H1. It is the only player in the list of top five which also includes Maruti Suzuki, Hyundai, Tata Motors and Honda to have not grown this year. Sales of its Scorpio, its popular SUV declined 11 per cent to 18,937 units in April-August period of FY19.

For Tata Motors, sales of the Hexa SUV slipped 31 per cent to 5,769 units. Pareek, however, said Hexa had a purpose and it served that. “We are building a big portfolio of SUVs. We wanted a product to learn more about the segment. We had a large SUV portfolio in the past. But then there was a gap for long time and our knowledge was not contemporary. Hexa helped us understand the market”, he added. Business Standard

Fuel prices rise again: Diesel crosses 78-mark in Mumbai, petrol at Rs 87.8

In Delhi, petrol is being retailed at Rs 82.36 per litre, up from Rs 82.26 on Wednesday.

Fuel prices were raised across the country on Thursday. While petrol prices were increased by around 10 paise, diesel prices were hiked by around 28 paise in the four metro cities of Delhi, Mumbai, Chennai and Kolkata.

In Delhi, petrol is being retailed at Rs 82.36 per litre, up from Rs 82.26 on Wednesday. With a 27 paise hike, diesel is priced at Rs 74.62 per litre.

After the revision, petrol is being sold at Rs 87.82 in Mumbai, Rs 85.61 in Chennai and Rs 84.19 in Kolkata.

Cost of diesel in Mumbai, Kolkata and Chennai is at Rs 78.22, Rs 76.47 and Rs 78.90 per litre, respectively.

Last week, Finance Minister Arun Jaitley had announced a cut of Rs 2.50 per litre on both petrol and diesel prices.

Most states, including Gujarat, Chhattisgarh, Bihar, Uttar Pradesh, Tripura, Jammu and Kashmir, Himachal Pradesh, Assam and Jharkhand, had also announced a cut in taxes.

On Thursday, Meghalaya became the latest state to announce a reduction in petrol and diesel prices. The state government has reduced fuel prices by Rs 2.50 per litre.

However, the relief may be short-lived as fuel prices are slowly going back to the previous levels. Since the Centre announced the cut, petrol and diesel prices have gone up everyday, except for Wednesday when petrol prices were kept unchanged.

Business Standard

Petrol crosses Rs 77 mark on rising global rates; diesel at Rs 68.50

Retail selling prices have been firming up since July 30 as international rates inched up.

Petrol prices have crossed the Rs 77 a litre mark for the first time in two months due to firming international rates.

Petrol price in Delhi was on Tuesday hiked by 9 paisa a litre to Rs 77.06 while diesel rates went up by 6 paisa to Rs 68.50 per litre, according to daily price notification issued by state-owned oil firms.

Fuel prices in Delhi are the cheapest in all metros and most state capitals due to lower sales tax or VAT.

Retail selling prices have been firming up since July 30 as international rates inched up. Rates have risen by Rs 0.90 a litre in case of petrol in nine days while diesel prices have risen by Rs 0.88 per litre.

Petrol price had touched an all-time high of Rs 78.43 a litre on May 29 and had since receded. On that day, the diesel price had touched an all-time high of Rs 69.30.

Petrol was last above the Rs 77-mark on June 9 when it was priced at Rs 77.02 a litre in Delhi. On that day, diesel was priced at Rs 68.28 per litre.

State-owned oil firms had in mid-June last year dumped 15-year practice of revising rates on 1st and 16th of every month in favour of daily price revisions.

High prices have off-and-on triggered demands for a reduction in excise duty but the government had ruled out any immediate cut.

The Centre currently levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) - the lowest being in Andaman and Nicobar Islands where a 6 per cent sales tax is charged on both the fuel.

Mumbai has the highest VAT of 39.12 per cent on petrol, while Telangana levies the highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel.

The central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.

This led to its excise collections from petro goods more than doubling in last four years - from Rs 991.84 billion in 2014-15 to Rs 2290.19 billion in 2017-18. States saw their VAT revenue from petro goods rise from Rs 1371.57 billion in 2014-15 to Rs 1840.91 billion in 2017-18.

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Petrol prices cut for sixth straight day: Here's what you pay in top cities

Petrol now costs Rs 75.55 per litre in Delhi, down from Rs 75.69 on Monday.

Fuel prices were lowered for a sixth consecutive day on Tuesday. While petrol prices fell by up to 14-18 paise in the four metro cities, diesel prices were down by 10-14 paise.

According to the prices announced by Indian Oil Corp (IOC), petrol was being sold at Rs 75.55 per litre in Delhi, down from Rs 75.69 on Monday. Diesel prices in the national capital were down 10 paise to Rs 67.38 a litre.

In Mumbai, petrol now costs Rs 83.12 a litre and diesel Rs 71.52 a litre. On Monday, petrol and diesel in Mumbai were priced at Rs 83.30 and Rs 71.66 a litre, respectively.

The price of petrol in other major cities are Rs 78.23 in Kolkata and Rs 78.40 in Chennai. The revised diesel price stands at Rs 69.93 in Kolkata and Rs 71.12 in Chennai.

Here are the prices of non-branded petrol across the country (Rs/litre), applicable from 6:00 am June 26:

Bangalore: Rs 76.77
Bhopal: Rs 81.14
Bhubaneswar: Rs 74.38
Chandigarh: Rs 72.66
Dehradun: Rs 77.07
Gandhinagar: Rs 74.87
Gangtok: Rs 78.65
Guwahati: Rs 77.66
Hyderabad: Rs 80.03
Imphal: Rs 73.69
Jaipur: Rs 78.27
Jalandhar: Rs 80.73
Lucknow: Rs 76.56
Patna: Rs 81.04
Pondicherry: Rs 74.37
Raipur: Rs 75.97
Ranchi: Rs 75.72

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Truckers begin nationwide indefinite strike against rising fuel prices

The strike is likely to cause a hike in prices of perishable goods items due to supply constraint.

Truckers Strike : Truck owners and operators launched an indefinite nationwide strike on Monday against increasing diesel prices and a sharp hike of third party insurance premium.


"The indefinite strike against the soaring diesel prices and steep rise in the third party insurance premium begun this morning. About 90 lakh trucks are expected to be off the road and as of now, over 60 per cent trucks were not plying on the roads across India," the All India Confederation of Goods Vehicle Owners' Associations President Channa Reddy told IANS.


"The government's argument is that the fuel price increase was due to international prices. However, we think the reason for price increase is not due to international prices but high taxes levied by the governments, Centre and the states," Reddy said.


Demanding the inclusion of diesel prices or petroleum products in the ambit Goods and Services Tax (GST), the Federation of West Bengal Truck Operators' Association Joint Secretary Sajal Ghosh said there has been a good response in the state where about 3.5 lakh trucks would not ply on the roads.


He said the Federation is also protesting police and Motor Vehicle Department officials' alleged excesses in the state.


Moreover, truck owners requested the Insurance Regulatory Development Authority of India to detariff the third party insurance premium as it has done in the case of comprehensive insurance policy, Reddy said.


"Since the trend of annual increase of third party insurance premium has been continuing for last 15 years even after opening of the insurance sector. To stop the increase per year, we have requested the IRDAI to detariff this. But, the authority has not responded to our demand," Reddy added.


The strike is likely to cause a hike in prices of perishable goods items due to supply constraint.

End to relentless petrol, diesel price rise brings no joy as cuts minuscule

These small cuts contrast against the nearly Rs 4 per litre rise in petrol prices during May 14-29, with the daily hike in prices varying around 15-30 paise a litre

High fuel prices  have burnt a hole in the common man's pockets. With mounting frustration, rates have been cut for the third consecutive day today. However, this is likely to be cold comfort for most given that the reduction in prices has been minuscule. Prices for petrol and diesel fell by 6 paise and 5 paise per litre, respectively, on Friday. After a one paisa cut in fuel prices, petrol prices across the four metros were cut on Thursday by seven paise a litre and diesel prices fell by five paise.

Petrol now costs Rs 78.29 per litre in Delhi, while the price of diesel has been revised to Rs 69.20 a litre. The revised Petrol prices in other metro cities are -- Rs 80.92 in Kolkata, Rs 86.10 in Mumbai, and Rs 81.28 in Chennai. The revised diesel prices are Rs 71.75 in Kolkata, Rs 73.67 in Mumbai, and 73.06 in Chennai.


How does this measure up against the previous hike in petrol prices? These cuts contrast against the nearly Rs 4 per litre rise in prices during May 14-29, with the daily hike in prices varying around 15-30 paise a litre. Similarly, diesel prices in all the four metros also were at record levels during the period.


A direct comparison of prices brings home the point. In the national capital on Thursday, petrol was sold at Rs 78.35 per litre, down from Rs 78.42 on Wednesday. Compared to Friday's prices, that is just a 13 paise difference in the favour of the consumer.


On Thursday, in the other key cities of Kolkata, Mumbai, and Chennai, the fuel was priced at Rs 80.98, Rs 86.16, and Rs 81.35 a litre, respectively. All these prices were down by seven paise from Wednesday's levels.


On Thursday, diesel prices in Delhi, Kolkata, Mumbai, and Chennai stood at Rs 69.25, Rs 71.80, Rs 73.73, and Rs 73.12 per litre, respectively.


After 16 days of relentless price hikes that followed lifting of a nearly three-week hiatus on price revision just before Karnataka went to polls, petrol and diesel prices were cut for the first time on Wednesday. However, the quantum of reduction was just one paisa.

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Petrol, diesel prices hike may stay high in immediate future': 10 points

Even as people across India see rising fuel prices burning a hole in their pockets, the price of petrol has touched Rs 85 a litre in Mumbai and Rs 77.17 a litre in Delhi

Petrol and diesel will continue to burn a hole in your pocket as Hindustan Petroleum Corporation Limited (HPCL) Chairman and Managing Director Mukesh Kumar Surana has told news agencies that fuel prices might remain high in the immediate future. Petrol prices in the country's financial capital, Mumbai, touched Rs 84.99 a litre on Wednesday, while the fuel's price inched higher to a new record of Rs 77.17 in Delhi. In Delhi, Kolkata, Mumbai, and Chennai, diesel was sold at Rs 68.34, Rs 70.89, Rs 72.76, and Rs 72.14 per litre, respectively.



As of Wednesday, one trigger after another had led to the 10th consecutive day of increase in retail selling price of petrol and diesel . As frustrations mounted across the country, Union Law & Justice, Electronics, and Information Technology Minister Ravi Shankar Prasad on Wednesday said that the Narendra Modi government was working on a long-term plan to tame fuel prices. "Instead of an ad-hoc measure, the government wants to have a long-term view that addresses not only volatility but also takes care of the unnecessary ambiguity arising out of frequent ups and downs," Prasad said.



The government has come under attack from the Opposition as fuel prices have gone up day after day. Former finance minister P Chidambaram claimed that the rates could be reduced by Rs 25 per litre but the government was not doing so. "It is possible to cut up to Rs 25 per litre, but the government will not. They will cheat the people by cutting price by Re 1 or Rs 2 per litre of petrol," he said in a Tweet.

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