Driving is likely to get more taxing in the coming days with urban development ministry proposing a fresh cess on automobile fuels to fund urban transport systems on the lines of the cess on petrol and diesel to finance highway construction reports Times of India.

The latest proposal seeks to raise petrol prices by Re 1 per litre. And unlike the highway cess, the move will deliver a twin blow to vehicle owners. A note being finalised by the ministry also seeks to levy 8% cess on the cost of a car and 4% on two-wheelers.

If the move goes through, a Maruti 800 will cost Rs 15,000 more, while the impact on more expensive vehicles will be much higher. There is, however, some ambiguity on how the cess will be levied since the cost of the vehicle has not been defined clearly by the ministry.

Irrespective of whether the government allows oil companies to raise petrol prices to soften the impact of rising international crude prices, the urban development ministry’s plan, if accepted, will lead to a rise in the cost of auto fuel.

The resources generated through the cess will be transferred to the proposed Dedicated Urban Transport Fund and used to exclusively support transport projects like Metro networks in cities. The idea is to meet two long-term objectives: reducing the use of private vehicles to control congestion and popularising public transport, said sources.

In the absence of efficient public transport systems, commuters have been purchasing vehicles to beat the rush in buses and city rail networks leading to a situation where many urban households have two cars.