Diesel engined cars survive excise bump up scare!

2011 Fiat Grande Punto MJD Diesel

Days ago, we brought you a rather wordy piece on how Diesel engined cars could get dearer post the 2011 Union Budget. The good news however is, diesel engined cars will not get any dearer post budget as the Finance Minister, thankfully, has steered clear of effecting a one time levy on diesel engined cars to make up for the subsidies doled out for diesel as a fuel. This bit of buzz would definitely come as a welcome breather, both for car makers as well as car buyers as the purported steep hike of up to INR 1 Lakh had all the potential to mightily upset the currently-on-a-roll apple cart of diesel cars.

All said, such a hike has not happened and even as we publish this, there would definitely be question marks raised as to why such a hike was not effected in this budget. This, as diesel continues to be heavily subsidized by the Government to aid the agriculture as well as the commercial transport sector and the subsidies being used up by private diesel car and SUV owners seems unreasonable to many dissenting voices calling upon the enforcement of levy on diesel engined vehicles.

The finance minister however, made a very interesting statement in his budget speech today wherein he talked about a staggered increase of diesel prices to ensure that the teeming poor of India don’t face the brunt of a steep and sudden increase in diesel prices. This move obviously would entail the removal of subsidies that the government currently doles out to diesel as a fuel. So, indeed diesel as a fuel will become pricier, at least to car buyers in the coming few years and could probably even be costlier than petrol, just like it is in many developed countries if all the subsidies are removed and diesel prices aligned to global levels.

That said, even this shouldn’t manufacturers nor the car buyers from exploring diesel engines as a more frugal source of automotive propulsion as a similar capacity diesel engine vis-a-vis a petrol engine will deliver better mileage for the same quantity of fuel while being torquier, more durable and more drivable for day to day use with modern diesel injection technology. So, diesels are here to stay, with or without subsidy and if you’re wondering whether you should put your money down on a diesel car, we most certainly feel, you should if you drive more than 1000 Km a month.

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