diesel is pushing the market towards bigger cars and SUVs that guzzle
more fuels, and undermines fuel efficiency advantages of small cars. In
2011, the SUV segment registered a 41 per cent growth – a trend that is
all set to explode.
differential has always been officially justified in the name of agriculture and
freight. But rich car owners have benefited more from it. Cars have already
become the second biggest user of diesel and beneficiaries of the official fuel
tax policy. The government must impose additional duty on diesel cars to
neutralise the effect of low tax diesel.
Anumita Roychowdhury, head of CSE’s air pollution team, “It is
unacceptable that government should continue to incur huge revenue
losses. With each litre of petrol replaced by diesel to run a car,
excise earnings drop seven times. These losses will increase with the
growing share of diesel cars and SUVs. The effect is so dramatic that
the excise earnings from both diesel and petrol are now nearly equal.”
Central government is estimated to have lost close to Rs 800 crore in
fuel excise, just from the diesel used by the new diesel cars sold in
2010-11. From the on-road fleet the loss is staggering -- close to Rs
the introduction of Bharat Stage III and IV fuels in April 2010,
concerns over toxicity continue to rage. According to international
regulatory and scientific agencies such as the World Health
Organization, diesel particulates are toxic air contaminants and
current emissions standards in India legally allow diesel cars to emit
more particulate matter and nitrogen oxides. This will further worsen
pollution levels that are fast deteriorating not only in big cities but
also in smaller cities and towns of India. India is dieselising without
clean diesel (diesel with 10 ppm sulphur diesel and advanced emissions
government fails to put the brakes in this budget, investment in diesel
car facilities will continue. Car industry is now desperately
reinventing to roll out more diesel models in small car segment as well.
This would also make industry more resistant to emissions improvement
and undermine the negotiating power of the regulator to push for tighter
emissions standards. Cheap diesel for cars has to go, for all our sakes.
governments have taken fiscal measures to discourage diesel in cars. In
Denmark, diesel cars are taxed higher to offset the lower prices of
diesel fuel. In China, taxes do not differentiate between petrol and
diesel. Sri Lanka has imposed very high duties (300 per cent) for diesel
cars. Even in India, several official committees have asked for special
and additional taxes on diesel cars to neutralise the incentive of
cheaper diesel fuel.
freeing up diesel prices is a decision that is politically difficult to
take, at least increase the tax on diesel cars to fully neutralise the
incentives that diesel cars get from the low taxed diesel fuel. Or ban
the use of diesel in cars.
[Centre for Science
and Environment is a Delhi based non-governmental Organisation
known for its policy research and advocacy on environmental issues]