Sales of diesel models for passenger vehicle makers are continuing the downhill trend as car buyers in India increasingly veer towards gasoline- driven models following a narrowing price gap between the two fuels. Analysts expect the ratio between petrol and diesel to get skewed further in favour of petrol.
A deregulation in prices of diesel from October 2014 has led to structural reduction in the price gap of diesel and petrol. The gap narrowed from a historic high of Rs32 per liter in June 12 (pre-deregulation) and Rs21/liter in July 2015 (post-deregulation) to an average Rs7/liter in FY20, according to a recent Motilal Oswal research report.
