Praful Patel lends his weight to diesel vehicles

Those arguing against additional tax on diesel-run vehicles and de-regulation of diesel prices on Wednesday got a shot in the arm with support from none other than heavy industries minister Praful Patel. Manu P Toms reports.

Those arguing against additional tax on diesel-run vehicles and de-regulation of diesel prices on Wednesday got a shot in the arm with support from none other than heavy industries minister Praful Patel.

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Addressing the annual conference of the Society of Indian Automobile Manufacturers (SIAM), Patel spoke in favour of continuation of diesel subsidy and promotion of diesel vehicles even as Planning Commission deputy chairman Montek Singh Ahluwalia argued for gradual de-regulation of diesel.

Petrol prices were freed from government control a year ago, and petrol now costs R64 a litre while diesel, still subsidised, costs R41.

Patel also urged for policy support for diesel vehicles. “The automobile industry is moving towards diesel. More cleaner technologies are developed in diesel engines.”

SIAM members, particularly those with big diesel portfolios, welcomed Patel’s statements. “We are pleased to hear that the minister has taken the right position that the government should not discourage diesel vehicles as they have lower CO2 emission,” said Pawan Goenka, president, SIAM and president, auto sector, Mahindra & Mahindra.

The proposal to levy additional tax on diesel cars and sport utility vehicles (SUVs) “will kill diesel technology in India.” M&M, which holds above 60% in the utility vehicle segment, has a significant diesel portfolio.