Fuel ban freeze triggers rush to reclaim vehicles
New Delhi: The temporary suspension of Delhi’s abrupt fuel ban on overage vehicles has triggered a wave of confusion and activity across the capital, from overwhelmed transport offices to plummeting second-hand vehicle prices and disrupted loan and insurance operations.
The fuel ban, enforced from July 1, targeted “end-of-life” (EOL) vehicles, diesel cars older than 10 years and petrol ones over 15, barring them from refuelling stations and declaring them unfit for public roads. Enforcement teams began impounding vehicles and issuing fines, leading to a panic sell-off across the city.
Faced with growing public outrage, the Delhi government paused the ban within days. It issued a clarification that vehicles cannot be forcibly seized or sold and rolled out a process for owners to reclaim them, provided they meet emissions standards and clear any dues.
Owners are now required to verify vehicle status through the transport department’s portal, submit proof of ownership, clear applicable fines, and undergo an emissions test. Those whose vehicles meet the standards may be eligible for re-registration, while others can scrap their vehicles and receive a financial incentive of up to 6% of the ex-showroom price of a new car under the government’s scrappage scheme.
But the damage was swift and severe, especially in Delhi’s bustling second-hand auto market. “The phones were ringing nonstop for three days, mostly buyers from southern states thinking they could grab a deal,” said Iqbal Singh, who runs a used car dealership in Delhi. “Now, the same buyers have gone quiet. Prices have dropped by almost half, and we’re stuck with unsold inventory.”
Industry insiders report a 40% to 50% drop in resale values within days. The Chamber of Trade and Industry estimates that nearly 60 lakh vehicles may be impacted by the policy.
Brijesh Arora, owner of a dealership said, “We’re facing lakhs in losses. We sold vehicles under distress fearing government seizure. Now those same vehicles can legally be reclaimed. Who will compensate us?”
The financial sector hasn’t been spared either. With the sudden classification of financed vehicles as non-operational, borrowers began defaulting on auto loans in mass. “We had at least 50 cases this week where borrowers requested early closures or loan terminations,” said a loan officer at a major private bank, requesting anonymity. “Some even abandoned vehicles fearing legal trouble. Recovery has become a nightmare.”
Insurance providers are also under pressure. Policies issued just weeks ago for vehicles now deemed EOL are being asked for cancellation or dispution.
Meanwhile, Chief Minister Rekha Gupta on Sunday said her government will approach the Supreme Court to push for uniform vehicle rules across the country, challenging the current restrictions that disproportionately affected Delhi residents. Additionally, Delhi Environment Minister Manjinder Singh Sirsa has written to the Commission for Air Quality Management (CAQM), seeking a national-level approach to overage vehicles. He admitted that the lack of tech infrastructure made enforcement inconsistent.
“Environmental responsibility is important,” said transport policy expert Vikram Sinha, “but when policy is enforced without preparedness, it punishes citizens instead of empowering them.”
As the capital recalibrates its green strategy, thousands of residents, car dealers, and financiers are left untangling the fallout of a policy that stalled before it even took off.
