Going the extra mile

The recent price reduction of petrol was welcomed by all motorists and the public. It will have a big impact on their day-to-day expenses and help them go an extra mile for less money. But many, including regulators and the public, fail to see the wider picture. The fact is that for far too long, this country has been following wrong policies and practices in this sphere. We are a net importer of petroleum products and shall remain so, at least until our oil deposits are exploited.

The Government spends billions of US Dollars every year to import both crude oil and refined petrochemical products for motoring/marine purposes and power generation. Thus we are saddled with a horrendous fuel bill. Can any steps be taken to reduce this massive fuel bill in the short and medium term, given that oil production at home is a few years away ? Yes - on both national and personal levels, we can work to reduce fuel consumption and hence, the import bill. One of the most glaring factors is the local price disparity between petrol and diesel. All Sri Lankan (and most Asian) Governments subsidized diesel for the sake of passenger and goods transport services, which mainly use diesel. The other simultaneous step was the imposition of high duties on diesel passenger vehicles, apart from buses..

The most plausible explanation for this line of thinking is that the authorities do not want ordinary motorists to enjoy the benefit of lower diesel prices.actually meant for goods and passenger transport.

Motorists who buy petrol anyway subsidise the cost of diesel made available to passenger and goods operators and on top of that, have to literally pay a heavy price if they opt for a diesel passenger vehicle. The idea is to encourage the purchase and use of petrol cars and jeeps and to use the ‘balance’ money to pump petrol.

But is this any longer viable in today’s world ? The answer is no, for a variety of reasons. No economy can hope to maintain subsidies for ever. Subsidies are a huge drain on the economy - petrol sales can only help foot part of the bill and the rest has to come from the Exchequer. That is not sustainable in the long term. There will come a time when the diesel subsidy is no longer viable for Third World economies. The answer is that at some point of time, both petrol and diesel prices should be on par.

The other aspect is that all old arguments against diesel vehicles no longer hold true. They are generally reviled in this country as an expensive, inefficient and pollution inducing proposition. On the other hand, today’s diesel engines are cleaner, more silent, more fuel efficient and more long lasting than ever. Mile for mile, they are far more fuel efficient than petrol vehicles of the same engine capacities.

To give just one example from a prominent European manufacturer, a Mercedes Benz C350 (that is a six cylinder 3.5 litre engine) petrol car generally consumes 14 litres of diesel per 100 Km, whereas its diesel equivalent takes just 10 litres to cover the same distance. That is a saving of four litres and quite a lot of money. One may note that this is a so-called high capacity engine - savings with smaller engines are even greater.

In other words, a diesel engined car will go much farther than its petrol equivalent with the corresponding amount of fuel.Now take this scenario to its ideal and logical conclusion: What if at least 80 per cent of modern vehicles on Sri Lankan roads were diesel powered ? One can just imagine the fuel and cost savings.

Unfortunately, our regulators have not seen this transformation taking place in Europe (75 per cent diesel penetration) and even in India (getting there). Even in the USA, where diesels were shunned due to attitude (not tax) problems, clean diesels are now gaining momentum. Another misconception is that diesel engines are ‘dirty’ and cause pollution. But facts prove otherwise. As in the above example, a C350 petrol engine outputs at least 235 grams of Carbon Dioxide per kilometre, whereas a C350 diesel outputs only around 190 grams. The story is the same for all modern diesels. Thus it is petrol engines which actually cause more pollution. Unfortunately, these facts are lost on our motoring authorities.

We are also lagging behind in welcoming hybrids (cars with petrol or diesel engines aided by electric batteries and motors) and totally electric vehicles to our roads. Most other countries grant tax concessions for the import and purchase of these vehicles which can save even more fuel.

The Government must seriously consider lowering duties for diesels and hybrids in the light of recent developments. The local manufacture of such vehicles in collaboration with established industry leaders too should be encouraged to further reduce our import bills.. It is time for a thorough review of our vehicle taxation policies and laws. The same goes for fuel pricing. They should be amended to suit the demands of modern times.

The authorities should call for the views of not only the motoring trade (who may be perceived as being biased, after all) but also those of scientists, intellectuals and the public (petroleum users) on these matters. We must not close our eyes to developments in this regard in our neighbouring countries and other parts of the world. The goal should be evolving a pragmatic vehicle policy that safeguards the interests of all - the Exchequer, the public and of course, the environmentalists.

Next week, we will take a close look at even more ways in which we can collectively and individually save fuel (or not use fuel at all whenever possible).

Only such a collective effort can reduce our dependence on fossil fuels, which will run out eventually.