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Diesel tax concerns hit auto stocks

Stocks of car makers were hit after reports said that the oil ministry has sought a big increase in the excise duty on diesel cars.

BT Online Bureau | June 13, 2012 | Updated 16:51 IST

Stocks of car makers were hit after reports said that the oil ministry has sought a big increase in the excise duty on diesel cars.

Reports quoting sources said that Oil Minister Jaipal Reddy was of the opinion that an additional excise duty of Rs 80,000 per car would not suffice and a higher excise duty needs to be levied to bring parity between the two fuels.

Domestic passenger car sales recorded the slowest growth in the last seven months in May at 2.78 percent and stood at 1,63,229 units from 1,58,809 units sold in the corresponding month of last year.

Not for just petrol powered cars, demand for the diesel vehicles has also slowed down due to the downturn in the economy.

Based on these concerns, Maruti Suzuki fell over 3 per cent while Tata Motors lost nearly 2 per cent. Shares of utility vehicle manufacturer M&M were off 1.75 per cent.

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