CSE slams petrol price hike as “mindless”
as it does not narrow the price gap with diesel
as it does not narrow the price gap with diesel
·
This is leading to gross
misuse of diesel by rich car owners and massive revenue losses to the
government
·
The government should either
ban use of diesel in cars or increase price of diesel and tax on diesel cars
New Delhi, May 24,
2012: “The
latest hike in petrol prices has further widened the gap between petrol and
diesel, mindlessly inciting and fanning the lure for diesel cars for its cheaper
run for the money. But the government is ignoring the severe public health
impacts of dieselisation in Indian cities; the energy impacts of the steady
shift towards bigger diesel cars and SUVs; and crippling revenue losses on
account of subsidy of rich car owners” – Centre for Science and Environment
(CSE) has come out with this statement slamming the petrol price rise announced
recently.
Already, diesel cars are close to 50 per cent of
the total new car sales in India. In the compact car segment – which is more
numerous and popular -- diesel cars are already 70-75 per cent of all car
sales.
Cheap diesel is not only worsening the public
health risk, but also inciting more motorisation and congestion. It is a threat
to energy security as well. Cheap 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.
Fuel tax 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.
Says 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.”
The 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 3,000 crore.
Even with 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 carcinogens.
The 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
If the 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.
Other 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
CSE demands:
If 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.
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