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MOTORINDIA
l
February 2012
Lobbying against dieselisation is gain-
ing momentum with the losses incurred
by oil marketing companies (OMCs)
mounting day by day. Strangely enough,
while petrol prices are being raised at reg-
ular intervals – 8-10 times since February
2010 – diesel prices have been revised up-
ward just on two occasions, by Rs. 3 per
litre in July last and by Rs. 2 in June 2010.
This is precisely the reason why there is
a distinct shift in demand for diesel ve-
hicles, despite their being comparatively
costlier than petrol vehicles. Official fig-
ures reveal that unlike in the past, diesel
growth during April-November 2011 has
been 7.4 per cent as against the petrol growth of 4.3 per cent. Much worse,
diesel growth in November last alone was a hefty 16 per cent against a negative
growth of 2.4 per cent in petrol. This perhaps must have prompted the Centre
to decide, in principle, to deregulate diesel prices, with its implication of a cut
in diesel subsidy.
On its part, the Petroleum and Natural Gas Ministry has for the first time
proposed an additional excise duty of Rs. 80,000 on diesel-driven cars in the
forthcoming Budget, besides seeking a five per cent import duty exemption for
energy and natural gas. Hopefully, the proposed levy will not only discourage
dieselisation of the economy but will yield additional revenue for meeting the
under-recoveries of OMCs as well as for investment on road infrastructure de-
velopment. Another positive suggestion made to discourage purchase of diesel
cars is that, while the excise on petrol-driven vehicles with ex-factory prices of
above Rs. 5 lakhs may be raised from 10 to 12 per cent, that on diesel vehicles
may be hiked to 30 per cent. This will enable car manufacturers to concentrate
on, and to compete in the production of economy cars.
Periodic fuel price hikes and problems therefrom facing vehicle users, partic-
ularly the general resentment among truckers, will continue baffling the Gov-
ernment since 84 per cent of the country’s crude oil requirements are imported
at heavy cost. The world crude price which ruled at around $75 per barrel in
June 2010 shot to $110 the next year and is now hovering around this rate,
though with minor fluctuations now and then. A fuel strategy for the future
based purely on alternate sources like natural gas for vehicles, LPG, CNG,
etc., is the right solution for the problem. It guarantees least vehicular emis-
sion too. Of particular significance in this context is that, in keeping with the
world trend, the Indian Government has undertaken a special national hybrid
/ electric mobility study that provides a fact-base towards formulation of a vi-
able mobility. The study stress is on hybrid electric vehicles having both an IC
engine and a battery-powered electric drive.
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Editorial
www.motorindiaonline.com
The anti-dieselisation drive
R. Natarajan, Managing Editor & Publisher
MOTORINDIA