The Society of Indian Automobile Manufacturers (SIAM) has welcomed Government's decision to reduce the differential between petrol and diesel prices by increasing diesel prices by Rs 5 per litre.

Speaking on the development, Mr S Sandilya, President, SIAM, said,"We welcome the increase in diesel prices as this step by the government will help reduce distortion in fuel price up-to some extent."

"Diesel price had been kept stagnant by the government since June 2011 despite increases in the overall crude prices in the International markets. This price correction will certainly help the government to recover some part of subsidy going to the fuel account. It is also important to note that the petrol prices have not been increased simultaneously, while excise duty has been brought down giving relief the Oil Industry. It is difficult to predict the impact on the demand for vehicles at this stage." he added.