Private vehicles guzzle much of diesel subsidy

A pan-Indian study conducted to observe consumption of diesel and petrol shows that 70 per cent of diesel and 99.6 per cent petrol is being consumed by the transport sector.

Based on the sector-wise consumption pattern of diesel, it indicated that about Rs. 12,100 crores of the total under recovery of Rs. 92,061 crores of diesel went as subsidy to the owners of private cars and utility vehicles (UV); about Rs. 8,200 crores to commercial cars and UV; about Rs. 26,000 crores to HCV/LCV; about Rs. 8,800 crores to public transport; about Rs. 12,000 crores to the agriculture sector and about Rs. 15,600 crores to other sectors.

According to the study conducted by Nielsen (India) Pvt Ltd for the Petroleum Planning and Analysis Cell (PPAC) of the Petroleum Ministry, of the total diesel sale, the highest consumption — 28.48 per cent — is by cars, utility vehicles (UVs) and 3-wheelers. It was also revealed that private cars and UVs account for 13.15 per cent, commercial cars and UVs 8.94 per cent and 3-wheelers 6.39 per cent.

Consumption of petrol

In case of petrol, 99.6 per cent is consumed by the transport sector, of which 61.42 per cent is accounted for by two-wheelers. Cars use 34.33 per cent followed by 3-wheelers at 2.34 per cent.

It was also revealed that in Odisha, Bihar and Rajasthan, petrol consumption by two-wheelers exceeds 70 per cent. For diesel, the transport sector was the major consumer accounting for 70 per cent of the total diesel sales. The share of diesel consumption by cars, utility vehicles and 3-wheeler sector is highest at 28.48 per cent. Out of this, private cars and UVs accounted for 13.15 per cent, commercial cars and UVs 8.94 per cent and 3-wheelers 6.39 per cent. Trucks (HCV/LCV) account for only 28.25 per cent of the diesel consumption. Buses consume about 9.55 per cent and railways about 3.24 per cent.

Agricultural sector

About 13 per cent of the total consumption was accounted for by the agricultural sector. The consumption was by tractors (7.4 per cent), pump-sets (2.9 per cent) and agriculture implements (2.7 per cent). Tractors have a higher consumption presumably because they are also used for non-agricultural purposes like the transportation of construction material such as bricks, stones, mined sand, etc., and for transporting people in rural areas.

As for petrol, almost 99.6 per cent was consumed by the transport sector. Two-wheelers account for 61.42 per cent of total petrol sales while cars account for 34.33 per cent. Three-wheelers account for only 2.34 per cent. The consumption by three-wheelers is very low in States like Delhi, Haryana, Gujarat and Odisha, where such consumers have shifted to CNG.

While pricing of petrol was deregulated, diesel prices are still being regulated, with under recoveries running at Rs. 8.47 per litre currently. The total under recovery on diesel during 2012-13 was Rs. 92,061 crores, constituting 57.2 per cent of the total under recoveries/subsidies on all petroleum products. The question as to where the diesel is getting consumed is very relevant in this context.

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Printable version | May 5, 2021 1:58:43 PM |

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