From 58% to 17% market share: Why Indians don’t like diesel cars anymore
When diesel was Rs 20-25/litre cheaper than petrol in 2012-13, cars running on it accounted for 58% of the market. Now, people buy less polluting options, and experts welcome it. New Delhi: Less than a decade ago, there were as many diesel cars on Indian roads as petrol cars. In fact according to data from the Society of Indian Automobile Manufacturers (SIAM), diesel passenger vehicles (PVs) had a 58 per cent market share in the fiscal 2012-13, the highest proportion ever. The cheaper cost of diesel compared to petrol made consumers disregard the fact that the former causes more pollution than the latter. At the time, on average, diesel used to cost about Rs 20-25 less per litre than petrol. But now, with that difference down to Rs 7-9 per litre, according to an analysis of government data, the market share of diesel PVs has dropped to just 17 per cent in the fiscal year ending March 2021, SIAM data shows. This has had an unintended but desirable consequence — that consumers are opting for cleaner options like petrol, compressed natural gas (CNG), and electric and hybrid cars. The fall of diesel PVs’ market share occurred after the Narendra Modi government deregulated fuel prices and ended subsidies, soon after coming to power in 2014. The move was contrary to policy making through the previous two decades, as the government sought to prompt consumers to shift to cleaner alternatives and to reduce its own financial burden. The impact of those policy calls is now visible. According to experts, as India moves to a better emission standards regime over the next few years, this trend is here to stay. Policy battle against diesel India has fought a long battle against diesel vehicles, which started about three decades ago. In the 1990s, following years of industrialisation, national capital Delhi had become one of the most polluted cities in the world. The situation was so grave that a doctor could judge a person as a dweller of the city just by looking at their “blackish lungs”, environmental advocacy magazine Down To Earth reported in 1996. In the middle of that decade, following a PIL by environmental activist M.C. Mehta, the Supreme Court took drastic steps to curb pollution, and the axe fell on public transportation running on diesel first. Following the SC order issued on 28 July 1998, all Delhi Transport Corporation (DTC) buses that were running on diesel were converted to CNG. By December 2002, diesel buses had disappeared from the city. Autorickshaws too had been upgraded to CNG. In 2016, the top court announced that only CNG taxis would run in Delhi, making an exception for diesel taxis running with an All India permit. Deregulation and its impact Until 2014, diesel was subsidised for several reasons — it was used by farmers to run tubewells, by industries to run machines, and freight and heavy commercial vehicles for transport. The benefit of the subsidies was also enjoyed by private vehicle owners, who, according to the Ministry of Petroleum and Natural Gas, formed about 13.1 per cent of the total diesel consumers by 2012-13. However, after the Modi government came to power, it ended subsidies and left the pricing of fuel to the markets. This proved to be a major jolt to diesel prices, which have been racing up and are now within touching distance of petrol. Diesel prices in Mumbai crossed the Rs 100 per litre mark Saturday, touching Rs 100.66 Sunday, while petrol was at Rs 110.12. The life of diesel cars on Indian roads was also curtailed in 2015 by the National Green Tribunal (NGT), which barred diesel cars older than 10 years from plying in the national capital. The latest National Scrapping Policy launched this year also aims to eliminate old and unfit vehicles from plying on India’s roads. With effect from 2020, all new cars also had to comply with Bharat Stage VI emission standards, increasing the gap between the production cost of diesel and petrol cars, disturbing the economics for the makers. India’s biggest car manufacturer, Maruti Suzuki, quit diesel manufacturing in 2020-21. Most companies in India have stopped releasing smaller diesel cars.
