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Diesel vehicles may be off NCR - Views on News from Equitymaster
 
 
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  • Sep 6, 1999

    Diesel vehicles may be off NCR

    According to news reports, the Environmental Pollution (Prevention and Control) Authority (EPA) in its report to the Supreme Court, is advocating a ban on diesel-driven private vehicles in the National Capital (Delhi) Region (NCR). If this recommendation is implemented, it would largely affect sales of diesel-driven passenger cars.

    The main concern that has driven EPA to moot the ban is the fact that diesel vehicles are a major contributor to the overall pollution level. This is the second time that the EPA has made such a recommendation. Earlier the Supreme Court had observed that petrol-driven passenger cars constituted an overwhelming majority in the NCR and had accordingly sought a ban on registration on cars, which are not compliant with Euro-I emission norms.

    EPA’‘s recommendation for a ban on diesel-driven vehicles has not gone very well with automobile manufacturers. The latter opine that since diesel-driven vehicles constitute a meagre 3% of total vehicular population, diesel vehicles contribute only a miniscule amount to vehicular population.

    Diesel being cheaper than petrol, diesel-driven cars are an attractive option for many consumers. With the anticipated hike in petrol prices, diesel-driven cars seem even more attractive. However, diesel-driven cars come at a premium to the petrol-driven ones.

    The Supreme Court is likely to take up the EPA report during its next hearing on September 17. If the Supreme Court decides to implement the ban on diesel-driven vehicles, it could have serious implications for certain car manufacturers like Fiat (Uno), TELCO (Indica) and Ford (Escort). Maruti also plans to come out with a diesel version in the small car segment. The ban would compel these manufacturers to step down production of diesel-driven cars and focus on petrol-driven ones. This assumes even more significance, given the fact that demand for diesel-driven cars may increase in a big way over the next few years, if the local petrol prices rise in response to a hike in global oil prices. Also it remains to be seen if the Supreme Court restricts its ban to diesel-driven passenger cars in the NCR or in other parts of the country.

     

     

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