Planning to buy a car? Brace for price hikes and a longer waiting period
Car prices were hiked several times by different automakers last year and this year too a fresh price surge seems imminent, owing to the rising input costs caused by the increasing fuel price in the international market. The global crude oil price hike is expected to drive domestic oil marketing companies to announce a price hike in India soon, which would impact the raw material costs and eventually the vehicle price in India.
Petrol and diesel prices in India remain unchanged for 115 days straight on 27th February. Prices have been frozen since the excise duty cut announced by the central government in early November last year, which was followed by subsequent VAT reduction by the state governments. However, with the latest geopolitical tension in eastern Europe, crude oil prices have been surging fast in the international market.
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According to a report by ICRA, domestic petrol and diesel prices in India are lagging by up to ₹8 per litre in the Indian market compared to crude oil prices in the global market. The global crude prices have already crossed $107 per barrel, which is a seven-year high for the oil price in the international market.
This makes the case for an imminent price hike of petrol and diesel in India, which will result in rising raw material costs. The aluminium shortage in the international market, chip shortage and other supply chain disruptions too are about to impact the vehicle price.
The ongoing conflict between Russia and Ukraine may turn out to be a double blow for the personal vehicle buyers in India, as prices may go north owing to input costs on one hand, while the waiting period for vehicles would likely get longer for the buyers on the other, with an expected disruption in chip supply.