Facing inter-ministerial turf battles and pressure from the automobile industry, the government has yet again held back on imposing fuel efficiency standards for cars — which would help cut oil imports by millions of tonnes.
The standards would have mandated efficiency improvements for a manufacturer’s fleet of cars over a period of time.
A two-year delay — for instance from 2015 to 2017 — in the enforcement of the standards would lead to lost savings of hundreds of millions of dollars in oil imports.
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The government began discussing the process to put fuel efficiency standards in place in 2007. The standards were conceptualised along the lines within the government, with the auto industry and civil society, the BEE finally proposed a clear set of norms in 2009 which would kick in mandatory standards from 2015 pushing the industry to improve the mileage of the fleets they were selling. Civil society organisations claimed the standards were so lax that they were asking the industry to increase efficiencies at rates lower than what the industry was anyway doing. But the auto industry remained stiffly opposed to the move for long. It brought up issues about lack of quality roads and fuel as well as an alternative self-labelling process.
The matter reached the PMO’s door step repeatedly. The PMO, in an attempt to settle the matter decided that while the BEE would set the standards while the ministry of road transport and highways would ensure their implementation.
With the pressure against the norms not dissipating the standards remained stuck on files till the burgeoning oil bill got the ministry of power active again. It struck another compromise. The power ministry decided that the enforcement of the standards would be postponed by another two years — from 2015 to 2017. But the power minister, Jyotiradiya Scindia stuck to his guns on not easing the standards further. A draft notification was prepared in the power ministry on the basis of this decision.
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The two year postponement in enforcing the standards is a compromise that the power ministry calculated internally would require the government to give up savings of 2.75 million tonnes of oil equivalent by 2020.
One of the purposes of putting the mandatory standards in place was to also ensure that the average weight of the cars being sold does not keep steadily rising as it can lead to increased gross consumption of fuel.
The Indian auto-industry had started at a better footing than the car markets in many developed countries on this ground. The sale of smaller cars remained at a relatively higher level than that of SUVs and bigger cars. For some years the industry notched an improvement in the efficiency of the engines even as the average car weight of the fleet sold continued to increase but in the past couple of years this has changed, ministry sources said. The sales of heavier vehicles have begun to increase and the average fuel efficiency of the fleet on road has dipped.
But, the argument between the ministries did not end here. The road transport and highways ministry held a meeting again in which it asked that the norms be diluted to ease the pressure on the auto manufacturers.
As facts stand today, the draft notification imposing fuel-efficiency standards remain just that – a draft. In the meanwhile the Ministry of Petroleum and Natural Gas has begun planning a campaign to advocate achieving fuel efficiency through other ‘consumer habits’, such as switching the engine off when one hits a red light while driving.