The proposed imposition of an additional 25% Road tax on diesel vehicles by the Delhi State Government is a highly retrograde step and would serve as an anti- environment and anti-fuel efficiency tax. This was stated by Mr Vishnu Mathur, Director General, SIAM today.As per the Budget Speech, this is being done in view of the various studies conducted on diesel emissions which suggest that diesel vehicles are highly polluting. Automobile industry would like to differ from this view and point out the fact that there are several inherent advantages of diesel vehicles which include lower carbon footprint, higher fuel efficiency, leading to lower overall utilization of fossil fuel and therefore savings on foreign exchange while importing oil, hence contributing to the energy security of the country.
The share of diesel passenger vehicles in the country has remained static at around 30%. In fact even as long back as 1980, the share of diesel passenger vehicles was 30%. Hence, there has been no significant change in the share of diesel passenger vehicles over the years. As against this, more than 50% of passenger vehicles in Western Europe use diesel fuel. Many of these countries including USA and Japan are incentivizing diesel to increase its share as an automobile fuel.
Diesel vehicles also entail a higher capital cost of around Rs. 70,000 to Rs. 1 lakh due to their heavier construction. Therefore, diesel vehicles already suffer a cost penalty. This is the reason why only some customers whose utilization levels are higher would prefer to purchase diesel cars due to which the ratio of diesel to petrol has remained the same over the years.
All vehicles, especially passenger cars being sold in the metro cities including Delhi are meeting the BS -4 emission norms. Once vehicles meet the Government set emission norms, it is wrong and unfair to classify them as being highly polluting and to penalize them through higher taxation. The SIAM statement said that today, diesel has emerged as a highly clean and green technology option for the automotive industry globally and many developed countries are actually promoting diesel transport by subsidizing the diesel fuel and by making available better quality of diesel fuels to run their vehicles. Diesel vehicles emit 20% lower carbon emissions. Diesel vehicles are also more fuel efficient as compared to other fuels by 25%.
Mr Mathur said that that a positive roadmap for the use of diesel by vehicles could be a key element in the Carbon Mitigation strategy of the country. By putting additional taxes on diesel vehicles, we would be closing this key technology option for the country to meet its global commitments in respect of carbon emissions. He urged the policymakers to be sensitive to the various technology options available so that our national interests are not compromised at a future date and not to implement the proposal of imposing an additional Road tax on diesel vehicles in Delhi in the larger National interest.
