Truck rentals are expected to fall for the third successive month in August by 5% owing to a sharp diesel price cut of Rs 3.60 a litre.
Truck rentals are expected to fall for the third successive month in August by 5% owing to a sharp diesel price cut of Rs 3.60 a litre. This follows a 3% drop in July owing to weak cargo offerings coupled with a Rs 2.70 a litre cut in the beginning of last month.
The 3% fall in truck rentals in July was due to 15% drop in the arrival of fruits and vegetables to the APMCs across the country coupled with lack of return loads at the factory gates for five days. This further went worse with a Rs 2.70 a litre in diesel price cut at the beginning of last month, said Indian Foundation of Transport Research and Training.
It is important to note that truck rentals dropped by 4% in June 2015. Now, with a further Rs 3.60 a litre cut in diesel prices on August 1 and the given the placid cargo offering scenario, the truck rentals expected to fall further by 3%-3.5% in next 7-10 days.
The continued fall in diesel price from June and expected drop in next 7-10 days has considerably benefitted the manufacturing sector by way of drop in logistic costs. Given the international crude oil price trend, the diesel price are expected to fall further in coming 4-6 weeks by another at least, 4%-5% and following this the peak festival season in the country may pick up, the foundation said.