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Diesel subsidy fuels SUVs, luxury cars

Fuel subsidies are a major drain on the Govt's Finances and Rs. 92,000 cr are spent to subsidise diesel alone every year.

autos Updated: Jan 31, 2014 13:41 IST
Anupama Airy
Anupama Airy
Hindustan Times
Diesel subsidy fuels SUVs,luxury cars

About 40% of subsidised diesel is being used by private cars, luxury and sports utility vehicles and by industries to power generator sets, machines and to run mobile towers. The government is spending about Rs. 37,000 crore every year subsidizing these activities.

These are the findings of a recent survey by Nielsen (India) Pvt Ltd for the petroleum ministry.

Fuel subsidies are a major drain on the gover nment’s finances and Rs. 92,000 crore are spent to subsidise diesel alone every year. With 40% consumption of subsidised diesel by big businesses and the rich, as much as Rs. 37,000 crore of the tax-payers’ money goes to subsidise do people who do not need subsidy.

“The transport sector is the major consumer of diesel and the share of diesel consumption by cars and utility vehicles is the highest. Private cars and UVs accounted for 13.15% and commercial cars and UVs used 8.94%,” the survey says.

“Industry accounts for 17% of diesel consumption. Of this, gensets account for 4.06% and other industrial uses account for 4.96%), mobile towers (1.54%) and construction industry 6.45%,” the survey says.

Diesel currently costs Rs. 54.34 a litre (in Delhi) and the stateowned oil marketing companies lose close to Rs. 9 on every litre of diesel sold even as the aam aadmi continues to bear the brunt of a monthly increase of 50 p a litre. Since January 2013, diesel rates have risen by a cumulative Rs. 7.19.

First Published: Jan 31, 2014 10:59 IST