The need for vehicle fuel economy norms in India

Road transport sector accounts for the lion’s share of oil consumption in India and is the sector which would be most exposed to the volatility of international oil prices once complete deregulation of the oil sector comes to the fore. The growth in oil consumption by the road transport sector over the past few decades has been fuelled primarily by economic growth coupled with conducive infrastructure for personalised passenger mobility which inherently bolstered the shift to personal vehicles (cars and SUVs) and especially to bigger and more powerful ones that are oil guzzlers. A key strategy for fuel saving would be to introduce mandatory fuel economy standards for vehicles. The report of the National Integrated Energy Policy brought out by the Planning Commission in 2006 underscored that 50% improvement in fuel economy could facilitate a saving of nearly 86 million tonnes of oil consumption by 2030-31. In fact, a large number of countries have already set up mandatory fuel economy standards for their vehicle fleet as a primary step towards energy conservation. The regulation of fuel economy standards of vehicles will not only help in achieving substantial savings in fuel consumption but will also facilitate in deriving considerable co-benefits in terms of reduced CO2 emissions and other local pollutants which are not environmentally benign and are associated with social cost in the form of adverse health impacts. (June 21, 2009)