Gadkari’s diesel dare spooks auto stocks

livemint.com:

NEW DELHI : The spectre of an additional tax on diesel vehicles rattled shares of top automakers on Tuesday before an official clarification that there was no such active proposal before the government. Earlier in the day, Union minister for road transport and highways Nitin Gadkari told an industry gathering that he would consider proposing an additional “pollution tax" on diesel engines if the industry doesn’t transition away from the “hazardous" fuel quickly enough. However, the minister later issued a clarification that said, “It is essential to clarify that there is no such proposal currently under active consideration by the government", and “it is imperative to actively embrace cleaner and greener alternative fuels.

These fuels should be import substitutes, cost-effective, indigenous and pollution-free". Shares of companies such as Tata Motors Ltd and Ashok Leyland Ltd —the country’s largest and second-largest commercial vehicle makers, respectively—and Mahindra and Mahindra Ltd, which sells nearly one in two diesel passenger vehicles in the country, fell in intraday trading. On a day the BSE Sensex index rose 0.14%, Ashok Leyland fell 2.68% to ₹179.85, Mahindra & Mahindra 1.55% to ₹1557.60 and Tata Motors 2.19% to ₹620.80.

“Pollution is a serious problem... I have been preparing a letter for the last 8-10 days to discuss with the finance minister. Today, when I meet the finance minister, I am going to request her that in the coming time, whoever uses diesel engines should be imposed a 10% additional GST so that the transformation will happen quickly...