WAREHOUSE manager Adrian Wang, 48, drives a lot, clocking close to 26,000km a year and spending 'over $500 a month' on petrol.

By that measure, he should welcome the Government's move to lower the tax for diesel cars from July.

The tax, currently four times more than that for a petrol-powered car, will be changed to $1.25 per cubic cm of engine displacement - effectively halving in value.

But Mr Wang is not moved.

'It's still not worth it,' he said, when told that diesel cars offered 25 to 30 per cent better mileage than petrol variants, and a two-litre model would attract a supplementary tax of $2,500.

'A diesel engine doesn't rev high,' said the driving enthusiast, who drives a high-performance Mitsubishi Evo Wagon.

He rattled off other downsides of diesels, like noise (that 'diesel clatter'), smell and the prospect of a greasy nozzle when it's time to refuel. He also pointed out that the only reason why diesel is retailing lower than petrol is that the latter is taxed.

'Unless it's cheaper than a petrol car, I won't switch,' he said. 'If petrol prices keep going up, I might convert my car to run on compressed natural gas instead.'

Motor industry sources reckon that a diesel car, with the new tax rates, would only make economical sense to motorists who clock 30,000km a year or more - or 50 per cent more than the average driver here - and who spends $600 or more a month on fuel.

Mr Eric Chan, general manager of Cycle & Carriage's Mercedes-Benz operations, worked out that a two-litre diesel car would save the owner about $1,600 on fuel a year - not quite enough to offset the $2,500 supplementary tax it would attract.

'You need to be clocking a lot more for this to make sense,' he said, but added that there had been 'a lot of customer enquiries' since news of the new diesel car tax broke last Friday.

Industry observers reckon that the new tax regime could work in favour of fleet owners, such as limousine services which typically have big cars and which clock high mileages.

IndoChine chief executive Michael Ma, who recently brought in an 8m-long stretch limousine powered by a 3.5-litre petrol engine, said: 'I really welcome the change. I hope it goes all the way down to be on par with petrol cars.'

He said the change allows him to consider a wider choice of limos.

Ms Tammy Tan, spokesman for transport group ComfortDelGro Corp, said the new diesel tax 'is certainly interesting'.

'But it is still too early to say whether we will be looking at introducing a limo service using diesel cars. We will explore this as a possibility,' she said.

Mr Lim Chong Boo of Premier Rent A Car, which operates a limo fleet of around 40 cars, many of which clock 35,000km to 40,000km a year, said he too would be shopping for diesel models now.

But Mr Lim, who is also in charge of Premier's taxi business, commented: 'I hope the new tax will be extended to the taxi industry.'

The Land Transport Authority, which announced the changes last Friday, said the diesel tax for taxis remains at $5,100 a year, which it said 'is still a discount considering the much higher annual mileage of a taxi compared to a car'.

A taxi averages 150,000km a year, while a car averages 21,000km.

The new tax rate, however, applies only to cars which comply with the stringent Euro IV emission standard. Non-Euro IV diesel cars attract a supplementary tax that is six times its road tax.