Supreme Court extends ban on diesel cars and SUVs in Delhi-NCR

The Supreme Court today extended the ban on sale of diesel cars and SUVs with engines over 2000cc in Delhi-NCR, till the next hearing in the matter which is likely to take place in April.

In a bid to tackle the rising levels of harmful particulate matter emissions, the apex court had imposed a ban on sales of diesel passenger vehicles in the region for three months starting in January which was scheduled to expire today.

Mahindra & Mahindra, Jaguar Land Rover and Mercedes-Benz India are some of the companies that have been the worst hit by the three-month ban.

While both JLR and Mercedes have repeatedly said that the ban on diesel engines creates an environment of uncertainty and will impact its expansion plans as well as future investments in the Indian market.

Mahindra & Mahindra decided to bypass the ban by announcing sub 2.0-litre variants of its popular SUVs like the Scorpio and the XUV500.

Reportedly, the apex court is considering lifting the ban on diesel-engined passenger vehicles if auto manufacturers agree upon paying a one-time environment compensation at the time of registration. This could lead to a significant bump up in the cost of diesel vehicles, which would render them too expensive compared to their petrol siblings.

According to estimates, around 1,300-1,500 vehicles are registered in Delhi every day and around 50 percent of them are diesel vehicles.

Meanwhile, the passenger vehicle industry is already witnessing a shift in consumer demand from diesel to petrol vehicles. Of the total PVs sold in 2013-14 (25,03,509), 42% were diesel and 58% petrol. For 11 months of FY2015-16, this ratio has gone even more in favour of petrol -- of the total 25,32,736 PVs sold, 34% were diesel and 66% petrol, a significant change.    

In a respite for diesel taxi owners, the apex court has extended the deadline for converting all diesel-run taxis into CNG in the national capital by one more month till May 1.