Motorists are still reluctant to embrace diesel vehicles because of FBT.

MOTORISTS are still reluctant to embrace diesel vehicles because the Fringe Benefit Tax doesn't promote fuel efficiency and the confusion over petrol versus diesel.

Last year diesel car sales jumped and so far this year private passenger vehicle diesel sales are up 50 per cent to 7573 and SUVs by 48.5 per cent to 9198.

The diesel market share in Australia in 2007 was around 16 per cent while in Europe it was 53 per cent.

Greenfleet boss Sara Gipton says there are two main reasons for the size of the gap - the current FBT system and continuing consumer confusion over the relative benefits of petrol and diesel vehicles.

"The current FBT system does nothing to promote the adoption of fuel efficient vehicles or behaviour," she said. "In fact, it rewards individuals for driving as many kilometres as possible. This has significant implications in terms of the environment, pressure on infrastructure and driver safety.

"The equivalent tax in countries like the UK (Benefit in Kind Taxation) is not based on kilometres travelled but on the CO2 output of the vehicle chosen. The more efficient the vehicle, the less the individual pays in tax, that's why so many choose the diesel option."

Ms Gipton said she believed that, while tax legislation was one way to influence buyer behaviour, the other was to ensure that drivers were better informed about the choices available to them.

"There are several factors for buyers to consider when deciding between petrol and diesel, neither is right for everyone, but it's important to understand how each of these could affect your ownership experience." Factors to consider include:

Power versus torque. While some petrol engines deliver more kilowatts than their diesel equivalents, look for the torque figure usually in Newton metres (Nm) to better understand how the vehicle will perform in everyday driving conditions.

Lifetime costs. Diesel is currently around 20 cents per litre more expensive than standard unleaded petrol (ULP) but many new vehicles (especially European models) require premium unleaded to run efficiently. Combine this with the fuel efficiency to see which will cost you more each year at the pump. Other things to consider are the purchase price, resale value and servicing costs that petrol and diesel vehicles achieve respectively.

Emissions. It's well known that diesel cars produce far less of the greenhouse gas CO2, largely due to their greater fuel efficiency. There is a lot of information around trying to discredit diesel fuelled cars based on the particulate matter and oxides of nitrogen (NOx) in diesel exhaust, however new generation diesel fuelled passenger cars are actually good performers in this area. Many European diesel cars, including all Peugeot, Citroen, Volvo and Alfa Romeos, meet stringent European standards for both particulates and NOx. Australian diesel fuel emission standards are a little behind Europe and the US, but the majority of new diesel fuelled cars sold in our market are not.

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