The Society of Indian Automobile Manufacturers has said that the statement made by the finance minister in parliament for removal of the subsidy on diesel fuel used by passenger cars is a step in the right direction.

In a statement issued, Dr Pawan Goenka president SIAM said that SIAM has always been advocating market linked pricing of automotive fuels including diesel. Petrol pricing is already market based and this move by government may be the first step in moving towards full market pricing of diesel.

However, the proposed scheme should include only personal use diesel passenger cars. The commercial applications of diesel passenger vehicles should be exempted from dual pricing of diesel fuel as it would impact mobility for the masses, especially in the rural areas.

Dr Goenka also added a note of caution that government would need to work out the implementing mechanism carefully for the proposed scheme so that it is not misused.