Two-wheelers consume twice as much petrol as cars: oil ministry study

29 Jan 2014


As car-buyers have been increasingly opting for diesel vehicles to take advantage of the artificial difference between petrol and diesel prices in India, a study conducted by Nielsen for the petroleum & natural gas ministry's Petroleum Planning and Analysis Cell (PPAC) finds that two-wheelers are now the biggest consumers of the more expensive petrol, accounting for 61.42 per cent of the fuel's consumption.

In contrast, private cars now account for only 33.42 per cent of petrol consumption.

Petrol consumption by two-wheelers accounts for over 70 per cent of total sales in Odisha, Bihar and Rajasthan, an oil ministry statement said quoting the survey.

The study should be an eye-opener for a government facing elections in a few months, when it is widely-predicted to lose its majority. Bikes and scooters are in India family transport for those who can't afford a car –  perhaps more so in rural areas where public transport is often almost non-existent.

''The subsidy on diesel was originally designed with the laudable objective of making the transport of goods and public transport for people cheaper. Unfortunately the government slept while private car buyers took advantage of the price difference to buy themselves big vehicles even as car makers focussed on making diesel engines more efficient. Now it difficult to reverse the trend,'' said a senior political economist now teaching at a US university.

On the diesel front, private cars consumed 13.15 per cent of the 69.08 million tonnes of the fuel consumed in the country in 2012-13. In contrast, commercial vehicles used just 8.94 per cent, while three-wheelers accounted for 6.39 per cent.

Commercial vehicles such as trucks constituted the largest user base of diesel at 28.25 per cent, the study said, adding that 70 per cent of the diesel was being used in the transport sector.

Agricultural equipment like tractors and pumps used 13 per cent of the diesel. The pumps are a particular concern to environmentalists, as their widespread use is rapidly depleting the country's underground water table.

Industries and electricity generators consumed almost 9 per cent of diesel, while mobile towers used 1.54 per cent.

"While pricing of petrol was deregulated, diesel prices are still being regulated, with the subsidy running at Rs8.47 per litre currently," an oil ministry statement said.

The total subsidy on diesel during 2012-13 was Rs92,061 crore, constituting 57.2 per cent of the total fuel subsidy – including kerosene and domestic cooking gas.

"The question as to where the diesel is getting consumed is very relevant in this context," it said.

The statement said, "Based on sector-wise consumption pattern of diesel, it would mean that of the total under- recovery of Rs92,061 crore on account of diesel during 2012-13, about Rs12,100 crore went to owners of private vehicles, about Rs8,200 crore to commercial cars and SUVs, about Rs26,000 crore to trucks, about Rs8,800 crore to buses, about Rs12,000 crore to the agriculture sector and about Rs15,600 crore to other sectors."

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