Published 29th June, 2018
Indian diesel fuel demand falls while auto industry struggles.
Demand is reducing for diesel vehicles and has seen a significant decline in recent years, according to analysts. This is the result of three key factors according to ICRA, India's independent investment and credit rating agency:
- A signficant narrowing in the price gap between diesel and petrol
- Superior fuel economy of hybrid cars which use petrol rather than diesel
- The implementation of BA-VI norms which the Supreme Court has proposed by 1st April 2019.
The need to battle alarming levels of air pollution, particularly in India's cities, has been behind the legislation, with predictions that diesel vehicle demand will drop below 25% once the new legislation comes into force.
The Indian auto industry is already feeling the full force of both an increase in crude oil prices and the depreciation of the rupee. Some OEMs have apprently been caught out by these combined elements, along with a ban on new diesel vehicle registrations with 2.0-litre engines and upwards introduced in the National Capital and Kerala regions as far back as 2016.