Hamish McRae: Go green, buy new, go diesel

What if petrol goes to a pound a litre - what should we do?

What if petrol goes to a pound a litre - what should we do?

For some, the answer is: give up the car. I was lunching the other day with a friend in a rather influential position, who was praising Ken Livingstone's congestion charge. But, she explained, she had given up driving. I refrained from pointing out that her children had grown up and she no longer needed to do the school run, and that the office would give her a limousine and chauffeur if she needed them.

I suppose some people can simply cut down on driving. A US poll suggested that 45 per cent of drivers had already modified their diving habits as a result of the surge in petrol prices there. But then, Americans have a habit of modifying. We don't. We used to: in the 1950s my father used to take us in the Austin A40 up into the Wicklow Mountains just for a ride. No-one now takes the car out for a spin.

Maybe some of us can manage to use the car less, walk more, ride a bicycle, whatever. But for most people there is only one practical way of cutting fuel costs. It is to buy a new car.

What? No, seriously, this is not just a two-finger response to Red Ken or Greenpeace. It makes great practical sense. They have become cheaper to buy, with prices falling. They have become cheaper to finance, for interest rates are still extremely low. And they have become much more economical - particularly if you go LPG, hybrid or diesel. So it should be hardly surprising that we bought nearly 2.6 million of them last year - a record. Car sales have been falling over the past five years in Germany, France, Italy and Spain, but here they are booming.

And the choice? It has to be diesel. There is an argument for getting an LPG car for people who want to avoid the congestion charge, and LPG for the time being is little more than half the price of petrol. But there is the extra cost of purchase, with no premium on resale and the shortage of filling stations. Besides, if LPG really became popular, expect the Government to increase the taxation. As for hybrids, there are only two on the market, from Honda and Toyota. I'm borrowing a Toyota Prius next week and will report back, but these are not cheap cars.

The shift to diesel has been astounding. In France, more than two-thirds of new cars sold last year were diesel; in Italy it was nearly half. Even in Britain, it was more than a quarter, compared with just 5 per cent 15 years ago. Last month almost a third of new cars sold had diesel engines.

Alongside this shift has been huge technical advance. Until recently, we had a little diesel Polo. It was about seven years old, was wonderfully reliable, and did 60 to the gallon. But it was very clear from the clatter at idle that it was a diesel. Last weekend in France, I rented a 307. Aside for the very large notices on the dashboard, the key and the filler cap telling you to fill up with diesel or gasoil, you could not tell what the engine was. From the size of the notices I suspect Hertz have found quite a few punters get it wrong.

New small diesels are incredibly efficient. The 307 I rented is rated at 57mpg but the smaller 206 is 65mpg. Here in the UK, diesel, unlike in France, is no cheaper than petrol - even a little more expensive. But if you think of the difference in fuel consumption, it is like buying petrol at 50p a litre. And because you are using less fuel, you are giving less tax to the Government.

If the price of fuel goes on rising, I suspect we will follow the French and soon more than half the cars sold in Britain will have diesel engines.