SC relief for luxury diesel cars may not change the big picture

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26 Aug, 2025 12:21

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The Supreme Court has lifted the ban on registration of diesel cars with 2000 cc engines in the National Capital Region, subject to a 1 percent cess paid at the time of registration. Transport and Highways Minister Nitin Gadkari may have mixed feelings about the ruling. On the bright side, auto industry captains will stop hounding Gadkari. On the other hand, Gadkari had said at a public event last month that any cess was the prerogative of the government, and not the judiciary. Also, he had promised that the government had no plans to levy a cess on diesel vehicles.The car industry is happy at the ruling, never mind the cess.“As far as the industry’s effect is concerned, the sentiment against diesel, that sentiment will again reverse and we will have a more balanced buying option with people relating to petrol and diesel,” Maruti Suzuki’s RC Bhargava told CNBC-TV18.  According to a report in the Indian Express, even registrations of private diesel vehicles with below 2000 cc engines in Delhi have been falling in 2016.From around 11,500 vehicles (below 2000 cc engine) registered in November last year, the number has plunged to 1651 vehicles in May 2016.Narrowing of the gap between diesel and petrol prices, the December 2015 ruling by the Supreme Court banning registration of luxury diesel cars in the National Capital Region, and the National Green Tribunal’s order in April 2015 seeking a ban on diesel vehicles over 10 years old, have all contributed to the negative sentiment against diesel vehicles in general.According to this report in The Economic Times, the share of diesel cars in total sales has halved to 26 percent over the last four years.While the Supreme Court ruling does provide some relief, remains to be seen if it will change the growing perception about diesel as a polluting fuel. Also, there could be limited support from the government for the diesel segment in future.“For the future, we can make the policy for diesel vehicles that the judiciary and society is expecting from us,” Gadkari had said at an industry summit last month, adding that the auto sector must step up its research on electric vehicles, and find ways to bring down the cost of an electric vehicle on par with diesel and petrol vehicles.He said that there will be takers for new technology which was pollution free and cost effective.