The number of unsold diesel vehicles has doubled in the past year and reached more than 107,000 units in May, data submitted by India's auto industry showed.

The auto industry submitted the report to the finance ministry concerning the steep decline in diesel car sales amidst talks of further hiking the price of diesel cars in India, Financial Express reported.

Regarding additional tax on diesel vehicles, India's petroleum minister Jaipal Reddy, in a letter to the finance minister Pranab Mukherjee, proposed to increase price of small diesel vehicles by INR170,000 (US$3,036) and that of larger ones by INR255,000 in order to even out the subsidy for diesel cars.

The auto industry has noted that the excise duty on large diesel cars, which are over four metres in length and above 1,500cc, is currently 27% and addition of state levies and various taxes brings the compound duty to a staggering 70%.

The company with the most unsold diesel inventory is Tata Motors with over 40,000 units left. While Mahindra and Mahindra has 24,000 unsold units, Maruti Suzuki reported 22,000 unsold units this month.