Bangalore: Personal cars are the lowest consumers of diesel in India out of the total diesel used in the country. This has been reported by the internal Planning Commission, which shows that diesel private cars consume a depressing 0.6 percent in the Indian market which is far beyond the profit margin obtained from the subsidy paid by the government as an effort to lower diesel prices. The planning Commission has also revealed that maximum consumption by good vehicles amount to 37.9 percent while for agriculture it is 18.8 percent.

According to this report, the share of the overall transportation sector which includes both public and private in diesel consumption has declined in 2010-2011 from from 59 percent to 56 percent. This is due to the fact that diesel fuel is being refined and new improvements in diesel sector are contributing to higher efficiency for diesel vehicles.

This report is yet to get publicized but has been shared by Society of Indian Automobile Manufacturers (Siam), the national association representing Auto Industry. It has raised concerns on the outcome of the  ongoing talks, as higher taxes are to be levied on diesel vehicles, compared to petrol consuming vehicles as subsidizing of diesel for private cars obtain a substantial profit keeping the diesel prices low. Vishnu Mathur, director general of Siam said “when the overall usage of diesel by personal cars is so low, at less than 1 percent, where is the argument to tax them higher. The fact is that personal diesel cars are not the major beneficiaries of the government subsidy, as is made out to be."

The note further revealed that goods vehicles consume fuel to a maximum 37.9 percent, passenger buses account for 6 percent of fuel usage while agriculture accounts for 18.8 percent fuel consumption.

However, in another report submitted by Kirit Parikh Committee a market-determined pricing system for petroleum products), it has been informed that diesel consumption of passenger car is 15 percent which is subsequently higher out of the total diesel usage. While the internal Planning Commission has fixed the usage of diesel for taxis at 2.1percent and jeeps/MUVs at 2.5percent, for three wheelers it suggests 3.6 percent, power 6.8percent, railways 3.7percent, industry 5.6percent and others 12.5 percent. This means private car owner's fuel consumption would be very less compared to the fuel consumption of taxis, buses, SUVs, railways etc.

The 2010 Parikh Committee report has distinguished passenger cars to consume a higher percentage in diesel consumption, however it does not bifurcate the sub-segments such as taxis, jeeps/multi-utility vehicles etc. While personal cars are charged an excise duty of 10 percent, for big cars taxes imposed is at 22 percent. As a recovery for the loss in subsidy offered to diesel, it is being hoped that the government might levy additional taxes on excise duty on diesel cars for the owners. A hike in registration tax for diesel vehicle is already in practice in Delhi which is becoming a global concern, threatening the environmental pollution. The hike in taxes on diesel cars has been criticized by the car industry which has expressed its concern regarding its growth and smooth functioning of the automotive industry.