Diesel cars guzzling 40% of segment`s fuel: CSE

Increased use of diesel by cars means enhanced public health risks and greater revenue losses due to the under-priced and under-taxed fuel.

New Delhi: Trashing industry contention that diesel use by cars is very low, the Centre for Science and Environment (CSE) Wednesday said 40 percent of the total fuel used in the car segment in the country is diesel.

An analysis of the car industry by the CSE found that in 2011-12, diesel cars will account for over 40 percent of the total car sales in the country.

Also, for the first-time ever, bigger diesel cars - the SUVs - are selling more and there is no slowdown in dieselisation.

Increased use of diesel by cars means enhanced public health risks. It also means greater revenue losses due to the under-priced and under-taxed fuel -- with each litre of petrol replaced by diesel to run a car, the excise earnings of the government dropped seven times, the CSE said.

"Without fiscal brakes in the forthcoming budget, India will pay a heavy price," says Anumita Roychowdhury, CSE`s executive director-research and advocacy and head of its air pollution and urban mobility team.

"The automobile industry is trying hard to prove that cars and SUVs are very small users of diesel, so that it can block the growing demand to put higher taxes on diesel cars to offset the revenue losses and cut public health risk," she said.

The analysis says cheap diesel is pushing market towards bigger cars that guzzle more diesel. "Petrol car sales are higher in small car segment - 87 percent of petrol cars are below 1200 cc -- while 40 percent of the diesel cars are above 1500 cc," it said.

There are 24 diesel car models in the engine size class range of less than 1,400 cc; 42 models in the range 1,401-2,000 cc; and 61 models in the class above 2,000 cc engines. This shows how more models are proliferating in the big car and SUV segments, the report said.

Use of diesel in cars has increased so much that the excise earnings from petrol and diesel have equalled despite high excise duty on petrol.

"If the new diesel car fleet to roll between 2009 and 2015 were to pay the same amount of excise as the petrol car fleet, the potential excise revenue from the lifetime fuel use can be as high as Rs.100,000 crore," Roychowdhury said.

"Present revenue loss due to diesel subsidy is Rs.86,000 crore," she added.

The Petroleum Planning and Analysis Cell of the union ministry of petroleum and natural gas said petrol consumption has slowed down while diesel use has registered 6.4 percent growth.

The CSE said it analysis showed the industry is playing with data to confuse and obfuscate.

"The new number game says diesel cars, SUVs and taxis use only 5 percent of total diesel used - cars use 0.6 percent while a committee chaired by Kirit Parikh found it to be 15 percent," she said.

The CSE has written to Finance Minister Pranab Mukherjee demanding additional tax on diesel cars to reduce public revenue losses and public health costs.


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