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Thursday, June 21, 2012

Petrol Price and Car Companies

If you had closely read the newspapers yesterday, you would notice that there was a news article that claims that all the major car manufacturers in the country are shutting down the petrol engine production and hence stopping the production of petrol variants of all their cars invariably. This will definitely reduce the demand for petrol. But would it reduce the price of petrol significantly? 

It is also told that these car companies are also offering huge incentives to push off all the petrol variants in their inventories as of now. Would people actually buy petrol cars without considering the long term running costs, just because the cars are damn cheap?

It is also reported that these manufacturers are not just stopping their petrol variant production, but they are also about the compensate the loss in the number of units to be rolling out of their plants by doubling the diesel car manufacturing capacity. Now, wouldn't this increase the demand for the diesel and hence increase its price in about a year or two? what do you think?

2 comments:

  1. very true! also, this petrol price hike has become a favourable scenario for more corruption. A few days back, in chennai almost 50 petrol bunks shut down just to create an artifical scarcity!! ppl were ready to pay any amount to get their petrol stocks asap!!

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  2. This happens all the times. Whenever the company knows that there would be a hike, they try to close the petrol bunk and reopen when the price is high. That is a huge profit indeed. If the general public want to save some hundred rupees before the hike was effective and stand in queue to fill the tank, would not the bunks try to close to reopen after a few hours to earn a few more lakhs of rupees?

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