[asr245]

I would take that with a large spoon of salt (not a pinch). A SIAM report saying that personal cars consume only 0.6% of diesel consumed. HAH!

Just another ploy to keep the cars (& SUVs/MUVs) rolling and profits high.

[rohan_iitr]

IMHO, the keyword in this report is "consume".

They have mentioned that diesel private cars "consme" 0.6% of the total diesel in the country.

It is possible to digest this 0.6% figure considering the fact that a private car owner's fuel consumption would be very less compared to the fuel consumption of taxis, buses, SUVs, railways etc. The reasons could be:
1. Cars are more fuel efficient than buses, SUVs, railways etc
2. A private owner would log lesser kms than a taxi, bus, railway etc

First of all, there is no way that this kind of fuel consumption can be accurately distributed between private cars and other vehicles. This can be, at best, either a guess work made by sombody or extrapolation of a few minute samples taken at different places at different times.

Also, instead of publishing the data on percentage of diesel consumption, they should publish the data on the percentage of private diesel vehicles. This would be a more accurate data to publish and would make more sense.

I'm sure that just the number of private owned Swift D's and DZire D's would add up to more than 2% of the total diesel vehicles in the country. Private Boleros, Scorpios, Innovas, Fortuners etc would be another 1% each.

Now that data makes more sense, even coming from a layman like me.

Rohan

[Chetan_Rao]

Wait. It's SIAM's report, isn't it? I wouldn't be surprised if they come up with "We're making huge losses on diesel cars" tomorrow and demand price support from govt. Oh wait (again), that's what is proposed right (though under a different guise)?

[patil]

Its better if the so called environmentalists, nation lovers and the government shut up and reduce the unnecessary duty being imposed on diesel cars. Everyone was behaving as if they are doing the nation a favour by using petrol cars and the diesel car users were waging a war against the nation. One should verify the facts and figures before making a statement and acting too much.

[SankalpDesai]

Originally Posted by bblost

I am curious how they figure this out.
As all these vehicles fill up from the same fuel pump and no one keeps a log on vehicle type.

I think they would have applied the age old method of data collection. Few guys must be standing at some designated bunks within the city and some on the highways. They must be standing close enough to the dispensing machines to make a note of the Quantity sold to the type of vehicle as well. The study would have occured over a month's time and inferences drawn on the final data collected. While this method certainly raises a lot of doubts and questions, it sounds reasonable enough as it is one of the easier ones to implement. Atleast, this does not involve the end user, which might result in delays and lot of traffic chaos at the fuel stations. Did anyone across the country notice any third party surveyors noting down information at any fuel bunks in the past few months?

Disclaimer - I haven't read this report but this is what i guess would have happened.

[srishiva]

Its a internal note from Planning Commission that has been shared with SIAM. Not something created by SIAM.
The total amount including taxis, SUVs etc is still 15%.

[sa_kiran]

Originally Posted by asr245

I would take that with a large spoon of salt (not a pinch). A SIAM report saying that personal cars consume only 0.6% of diesel consumed. HAH!

Just another ploy to keep the cars (& SUVs/MUVs) rolling and profits high.

Who profits the most by lower diesel prices? SIAM obviously, by fleecing car buyers. The end result is more pollution (no doubt that diesel is a dirty fuel) and the country's economy goes for a toss. But who cares?

[souravc]

Some of the conclusions :-
1. There are enough people who don't read - else why is this being dubbed as a SIAM report ? Is it too tough to read and understand that this is a planning commission note being quoted by SIAM
2. There are enough people who don't learn - else why the lame discussion about diesel being a dirtier fuel than petrol ! Technology has moved , too bad for the petrol-heads that diesel owners drive cleaner and more fuel efficient cars today which have loads of more torque too - a fuel which due to some Indian quirks also cost less . We can question the pricing mechanism but dubbing diesel as a dirtier fuel is just being ancient.
3. Why can't we see through the govt's ruse in taxing the daylights out of us. Some food for thought - you pay income tax for the infrastructure still you pay toll for the bridge ( which is infra), you still pay entry tax for developing infra in places like Panchgani / Mahabaleshwar , etc why do we pay twice ? India is fairly bankrupt , all the jacked up numbers are being exposed slowly and steadily - govt needs to tax and tax they will - today its the 0.6% diesel owners (possibly) , tomorrow it would be the Re 1 per litre in petrol prices due to USD movements. Net net , enjoy the ride and have fun pointing fingers at each other while paying through your nose

BTW, I fail to understand how SIAM profits more by selling more diesels ! Is it too difficult to figure out that any car manufacturer worth its salt had to undergo capital expenditure towards a production switch from petrol to diesel to cater to demand swings . Most companies did this switch partially given the uncertainty of the penal tax / levy on diesel cars that govt has been making a noise on , this is a fact . Given the high interest rate regime in India now , I am sure its not too difficult to work out that any capex, however limited, works out quite expensive . That apart diesel engines are more expensive to manufacture which is a proven fact . Thus I am struggling to understand how "SIAM makes more money by selling more diesel cars" - by more money I presume its meant that SIAM make more profits or is the hint towards topline ?? Wouldn't the same companies who form SIAM make very good profits if petrol prices are lowered too or is it an organisation comprising of only diesel vehicle manufacturers ?

On the balance, as some of the posts correctly mentioned , I would love to see how this data has been collected ( Knowing statistical sampling I am not one of those who expect to see anyone collecting samples at the neighbourhood filling stations) , whats the sample size and how the conclusion has been drawn . Even though 0.6% looks low , the government is being callous with all this talk about penalising diesel as a fuel - its time they woke up to the fact that this is a cleaner and more efficient alternative to petrol. It seems ridiculous that folks who seem knowledgeable about auto, fuels, markets, etc get swayed by the hogwash from the govt. Taxing the so called rich diesel cars/ SUVs would get a pittance , its pure BS that govt is subsidising the diesels - there are quite a few threads which explain the magic behind 'under-recoveries'

[Gansan]

Originally Posted by souravc

1. There are enough people who don't read - else why is this being dubbed as a SIAM report ? Is it too tough to read and understand that this is a planning commission note being quoted by SIAM

BTW, I fail to understand how SIAM profits more by selling more diesels !

It is a planning commission "internal" note, shared with us by SIAM! Therein lies the nub!

It is not a question of merely profiting more from diesel cars - which they do by pricing them much higher than is necessary. But the fact is currently the growth area is only diesel cars.

[Santoshbhat]

The Govt's main concern is that Diesel which is taxed lower than petrol is being consumed by a section of the society which it did not intend to be used by. Private cars are supposed to be owned by the 'rich' section of the society which is capable of paying taxes and hence according to the Govt., should be taxed and should not be allowed to use the fuel which is taxed lower (than petrol).

SIAM is concerned that this concern of the Govt. would make them take steps like imposition of higher excise duties on diesel engines meant for cars and SUVs, which would be detrimental to the Auto Industry. With statistics like these SIAM is hoping to dissuade the GOvt. from taking such steps.

If I was the GOvt. I will ask SIAM this :
"Rather than telling me the percentage of diesel consumed by cars and SUVs, tell me what is the percentage of Diesel cars/ SUVs sold out of the total sales of Cars and SUVs? We know that this percentage is becoming more and more skewed off late. So it is clear that petrol is hardly going to fuel luxury cars and big SUVs. Rather it is fueling scooters, bikes, small cars etc.... So we are taxing the poor scooter guy while the big boss driving the Merc is enjoying lower taxes on diesel. We know 1) We can't have differntial pricing. 2) Since hardly 3% of diesel is being used by cars/ SUVs, we can't increase taxes on diesel as it will affect other users who we don't want to disturb (inflation is already a major problem for us) , so how about we increase the excise duty on diesel engines that go into these big cars/ SUVs so that we can reduce the taxes on petrol to the extent of increase in revenue due to this imposition?"

[souravc]

Originally Posted by Gansan

It is a planning commission "internal" note, shared with us by SIAM! Therein lies the nub!

Would SIAM share something like this and palm it off as a planning commission note ? We can accuse SIAM of sharing selective information but think it would be wrong to question the correctness of an info share in black and white

Originally Posted by Gansan

It is not a question of merely profiting more from diesel cars - which they do by pricing them much higher than is necessary. But the fact is currently the growth area is only diesel cars.

1. Why is the growth area only diesel cars ? Its because of the pricing of diesel . If petrol is priced cheaper , would it not grow ? Why would SIAM only espouse the cause of diesels only ?
2. If petrols sell more , would the SIAM guys not profit more ? Or is it that SIAM members are only dependent on diesels for their profits. I can bet that they would - please check the profit growth rates of these companies for periods prior to FY10 (2010 is the year when de-regulation in petrol prices happened and the gap between petrol and diesel per litre really shot up so has to be taken as a cut-off year)

Thus its a misconception that SIAM gains from backing diesel at the cost of petrol and gains more by selling more diesels - they would be happily churning out good profits by selling more petrols too . Given that their production is so skewed towards petrol passenger cars , they would in fact be happier to sell more petrol cars than diesels . As has been mentioned by me , the manufacturers are reluctant to beef up diesel capacities and have petrols pile up as inventory while there is insane waiting list for diesels - does not help the profits of a company for sure . If anyone is unsure , speak to the dealer and ask him about his financial health in the current mix

[samarjitdhar]

Originally Posted by Santoshbhat

so how about we increase the excise duty on diesel engines that go into these big cars/ SUVs so that we can reduce the taxes on petrol to the extent of increase in revenue due to this imposition?"

If I were to summarize your argument what you are proposing is the government should now rob peter to pay paul

Already the government plays hocus pocus forgery with the fuel prices,the only apparent thing about that policy is petrol is taxed much higher than diesel by the government. As a tax paying citizen I expect the government to provide the basic levels of infrastructure which is sorely missing and souravc has already pointed out the myriad taxes we already pay.

If the government came up with the differential taxing policy on fuels they should also face the consequences of it and not expect people who can afford a Merc or a high priced diesel car for personal use to voluntarily opt for petrol cars because that would simply add to more tax payouts. My philosophy is pretty simple. All the taxes that I have paid till now have been wasted, probably siphoned off by the politicos. So I am not going to pay additional taxes anymore by using a petrol vehicle when I can screw the government by using a diesel one. Sorry for being so crude, but I want a few things done by the government first.

1. Improve income tax collection and umbrella, currently it is pathetic, among the lowest in the world.
2. Stop siphoning off money into offshore accounts and repatriate all the income stashed illegally outside India and collect taxes on them.

Once the government is ready to do that I will voluntarily using a petrol car or would be fine with government imposing additional taxes on diesel cars. My 2 cents.

[GTO]

Leaving aside the exact number (in this case, 0.6%), I don't have a doubt that private cars rank way lower than perceived on the diesel consumption charts. Someone I know is affiliated to Indian Oil; he has reliable data that calculates private car consumption (including UVs) at anywhere between 9 - 15%.

The largest, according to his reports, are commercial vehicles, railways & agriculture.

[ganeshtvpm]

cars @ 0.6 and three wheelers @ 3.6%. That seems to be a inaccurate stat.

[SAS]

Originally Posted by Gansan

It is a planning commission "internal" note, shared with us by SIAM! Therein lies the nub!

It is not a question of merely profiting more from diesel cars - which they do by pricing them much higher than is necessary. But the fact is currently the growth area is only diesel cars.

Actually SIAM would be pushing the government the other way around. They would like to lobby for the government to avoid increasing the taxes on diesel cars. SIAM would have to lobby hard given the irrational pricing of fuel which causes these crazy disparity in consumer demand and consequentially prices.Today diesel cars only provide handsome profits, petrol are marginal profits given the substantial discounts.

Irrespective, from a policy perspective, the government has got things all wrong. It is the common man who rides 2 wheelers and small petrol cars who take the brunt of the taxes. They pay a disproportionate part of their income as taxes since they save less and consume more as a percentage of their income. So the large indirect taxes kills them. They are also generally the salaried class who cannot escape direct taxes and cannot claim depreciation benefits on their vehicles nor can they claim the expenses of running vehicles against their income (except those at higher levels or certain companies who structure their salaries with a car expenses reimbursement)

The rich have lawyers, tax consultants and innovative bankers who help them overcome policy loopholes. The commercial transport sector has unions, etc. The car manufacturers have lobbies. The rich have companies where they charge their vehicles to and claim depreciation benefits.

The common man and salaried class have nobody to lobby or help them. All political parties are extremely corrupt and he cannot even vote for change. He has no choice but bear the brunt of a corrupt government who aims to fill their personal coffers instead of working for the common man. Things shall only get worse as income disparities widen and the poor get marginalized.