ECO LOGIC BY SUNITA NARAIN
Paying for diesel in subsidy and health
Paying for diesel in subsidy and health
Indian socialism needs a new definition: where the rich are subsidized in the name of the poor.
Let me explain.We know global oil prices are going through the roof.Indian oil companies,dependent as they are on importing some 80% of their crude are bleeding.The price of petrol has been raised,as the joke goes,to make it more expensive than beer.
This also means that the differential between petrol and diesel price has grown.It makes even more sense for the next car buyer to buy an expensive personal car perhaps even a Mercedes Benz but run it on diesel.It even makes more sense to buy a fuel guzzling SUV and run it on subsidized diesel.
Today,according to the governments own estimates,the use of diesel in personal vehicles has zoomed some 15% of the current consumption is in passenger cars.The entire agricultural sector uses less 12% of the countrys diesel.Oil companies also say that the under-recovery in diesel is now close to Rs 8 per litre.In other words,policy is deliberating pushing for dieselization of private vehicles and this only means that there is more loss to the oil company and much more damage to human health because of rising pollution in cities.
The car company claim that modern diesel vehicle is clean is far from being true.Emission data shows that current diesel cars,on an average emit seven times more particulates and three to five times more nitrogen oxides than petrol cars.There is sufficient evidence that tiny particulates PM 2.5 emitted from a diesel vehicle are toxic and carcinogenic.This toxin is firmly associated with significant increase in asthma and lung diseases,chronic bronchitis and heart damage.Long-term exposure can cause lung cancer.The increased level of nitrogen dioxide contributes to the formation of deadly ozone,which hurts and damages our lungs.So,be clear,diesel vehicles,however fancy and fitted,are costing us our health.
Today,Europe,which promoted diesel vehicles is paying a heavy cost.It is struggling to meet air quality standards,even though it has invested heavily in the cleanest of fuels reducing sulphur levels to near zero and has fitted vehicles with every kind of antipollution gizmo like particulate traps and denox catalyst.Diesel also has higher levels of black carbon,which is today understood to be a key contributor to climate change.In the US,the worlds car Mecca,where emission standards and price does not differentiate between fuels,there is no market for diesel cars.
So,why does Indian policy continue this perverse incentive to pollute The irony is there is no policy,which allows this use.It is simply a loophole car manufacturers struck gold when they realized that they could sell more vehicles if they could run them on cheaper and subsidized fuel.They exploit the fact that diesel price is kept lower because of its use for transportation of essential goods and for public transport trucks use some 37 per cent of the diesel consumed and buses another 12 per cent.They also know that dual pricing of fuel differential diesel price for bus or tractor verses cars cannot be operated.So,they merrily hide behind the helplessness of policy to fix this distortion.
But given the rising economic cost and pollution,this option of doing nothing cannot be acceptable anymore.The options are to either to equate the price and emission standards or to ban production of personal diesel vehicles.If this is not possible,then government should in the coming budget tax diesel vehicles – 100% cent of the price of the vehicle – to remove the existing fiscal distortion in price and policy.
We don’t need Nira Radia tapes to tell us that the lobby for diesel is big and powerful.It sits in glitzy chambers of commerce,which can bend policy to suit purse and purpose.The losers are oil companies.The losers are our bodies and our health.
The author is director of Centre for Science and Environment