Petroleum Products Pricing Policy – Adverse Impacts on Urban Air Pollution & Health

Expert Committee Report

The Expert Committee on “Auto Fuel Vision & Policy 2025” has submitted its Report to Govt. of India in May 2014.The report emphasized on improvement of of Vehicle Technology and Automotive Fuel Quality to BS IV/BS V emission norms. These imply huge capital investments in Refineries on the one hand and in the Auto-Mobile Sector, which is going to be a long drawn affair.

The Expert Committee recommendation for rapid transition to BS IV / BS V Automotive Fuels with 50 ppm/10 ppm Sulfur, without addressing carcinogenic tiny particles( rspm) -PM 2.5 -and Nitrogen Oxides emitted by Diesel Vehicles may not be of much use

Misuse of Subsidized Diesel

The Diesel prices are subsidized for reasons of public policy-its use for Transportation of Essential Goods & for Public Transport and for Agricultural purposes. Allowing its use in the Private Transport Sector is clearly a deliberate policy distortion. More than 40% of total Diesel consumption is reported to be misused by Industry, Cell Towers, Captive Power Generators and Passenger Cars. The fact that agricultural sector uses less than 12 per cent of the country’s diesel consumption, busts the myth.

The price differential between Petrol and Diesel, encouraged people to gravitate towards diesel vehicles. More the use of diesel, more the oil companies bleed. Worse, we all bleed because Diesel Emissions add to toxic pollution in our Cities, which in turn, adds to ill health and treatment costs. This is socialism of Indian style-Taxing the Poor to Benefit the Rich.

Health Hazards of Diesel

The claim of Car manufacturers that the modern diesel vehicle is clean, is far from true. Emission data shows current diesel cars 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 cases of asthma, lung diseases, chronic bronchitis and heart ailments. Long-term exposure can cause lung cancer. The increased level of nitrogen dioxide contributes to the formation of ozone, which, in turn, damages our lungs. So be clear, diesel vehicles, however fancy, are costing us our health.

Adverse Impact on Climate Change

.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 anti-pollution devices like particulate traps and de-NOx 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 Car Mecca, where emission standards and price do not differentiate between fuels, there is no market for Diesel Cars.

Adverse Impact on Urban Air pollution

The “Bhure Lal Committee” appointed by Hon'ble Supreme Court, to study ambient air quality in NCT of Delhi, in its report submitted as far back as 1999, stated that more than 90% of the Nitrogen Dioxide and Respirable Particulate matter present is due to Diesel Emissions. Other sources of Air Pollution is reported to be burning of waste materials- Plastics- in open area.

The Hon'ble Supreme Court also imposed restrictions on plying of commercial vehicles including taxis which are more than 15 years old as on 02-10-1998, in NCT of Delhi. Another serious source of air pollution amongst the vehicular pollution is the 3 Wheelers, particularly that are run on Diesel. What is applicable to NCT of Delhi, holds good for many of Indian Urban Agglomerations

Why Inaction & Indifference to Ground Realities ?

The irony is that the Car Manufacturers struck a gold mine, when they realised that they could sell more vehicles, if they could run them on cheaper and subsidized Diesel fuel. Why do the Policy / Decision Makers provide this perverse incentive to Diesel Car manufacturers to pollute?

The Government agencies know that the inflationary impact of raising diesel price will be high; they know it will be opposed. But they use this convenient cover to do nothing about the most glaring of distortions—the use of the subsidized diesel fuel by the rich and for private transport.

But given the rising economic cost and air pollution, the option of doing nothing is not acceptable any more. The options are either to link the car price with emission standards or to ban production of personal diesel vehicles. If this is not possible, then the government should tax diesel vehicles to remove the fiscal distortion in price and policy. The committee after committee has recommended that this be done. But it is not done.

Conclusion

 

In the light of the position explained above, the following are suggested for consideration:

a) 15 to 25 % cess on sale price be imposed on diesel Cars, SUVs, in
addition to corresponding increase in Life-Tax imposed by the respective
State Governments so as to compensate for the subsidized diesel used
in Life-Time of Diesel Cars/SUVs.

b) The bulk users other than Railways and State Road Transport Corporations be charged be charged market determined Diesel Prices.

 

c) Phase out all commercial vehicles including taxis, 3 wheelers, older
than 15 years, as on 31 st March 2015 onwards.

d) The Goods Transport by Road be discouraged gradually, by making Diesel expensive to the extent possible and to encourage goods
transport by energy efficient and Eco-friendly Railway Network, which needs
to be encouraged by allocation of adequate funds, instead of expanding
National Highway Network at the cost of Railways

e) The subsidy burden on Kerosene for rural lighting purposes, can be brought down, apart from avoiding health hazards of Kerosene, by supplying stand alone Solar powered LED Lanterns, with a life span of at least 5 years, for rural households through MNRE 

Decouple Supply and Consumption     

     Both Energy and Economic Policies must share a least-cost , resource efficient emphasis. The current subsidized Supply-Side focus exacerbates the causes of energy waste. That energy-waste  bleeds the Economy and the Society, particularly the unfortunate Have-Nots. The "Wise Energy" policy creates both  healthier Economy and healthier Environment. 

       

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