JUST consider this: if all the world's motor vehicles ran on diesel, the annual fuel saving would be equal to the total fuel used by all the cars in Europe each year.

This, though, may provide little comfort to anyone who has just been following a smoke-belching, evil-smelling diesel bus or truck. They may well ask, how can diesel be a sensible, environmentally acceptable alternative to a petrol engined car? The fact is, in almost all respects, a properly maintained diesel engine is far superior to an equivalent petrol engine, and the gap will begin to widen as more and more efficient diesels come on to the market.

In purely economic terms it is hard to put up a decent argument against buying a diesel car. They used to be more expensive than their nearest petrol equivalent, but this is not now the case, with most diesel-engined cars broadly the same price as their petrol brothers.

And there are other sound economic reasons for buying a diesel car, a fact recognised by the increasing numbers of British drivers who are opting for the oil-burners.

The savings which can be made by running a diesel car are part of the reason for this. PHH, one of the country's leading car fleet management companies, backs this up with some hard facts. They run 120,000 vehicles, an increasing number of which are diesel. PHH research shows that petrol cars use 37 per cent more fuel than their diesel equivalents and that the average fuel consumption of a diesel car is 42.8mpg, compared to 31.1mpg for petrol vehicles.

PHH also says that over the past two years the average price of a gallon of diesel in the UK has been 6.1p cheaper than unleaded petrol. And running cost comparisons continue the good news, with PHH discovering that an average 24 per cent cost saving is made by a diesel car over 60,000 miles compared with a petrol car.

Fuel saving is, of course, a large part of the environmental jigsaw simply because it means less fuel is used so less pollution is caused. But diesel has other environmental advantages.

A properly maintained diesel engine - those smoke-belching buses and trucks have not been properly maintained or serviced - causes far less damage to our environment than a petrol engined vehicle, even one fitted with a catalytic convertor.

Compared with a catalyst-equipped petrol engine the properly maintained diesel engine produces 90 per cent less carbon monoxide - the main gas responsible for the greenhouse effect - and 90 per cent fewer unburnt hydrocarbons. Also impressive - at least compared to the petrol engine - is diesel's record in carbon dioxide production, another contributor to the greenhouse effect. A diesel engine produces between 25 and 30 per cent less carbon dioxide than a petrol engine equipped with a 'cat'. This is essentially because the diesel uses less fuel to cover the same number of miles as the petrol car.

However, there are still problems with diesel, the most important being that diesel exhaust gases contain nitricoxides - one of the chief causes of acid rain - as well as particulates, more commonly referred to as soot, the black stuff which coats our buildings and which some believe may cause cancer, though the evidence for this is, so far, inconclusive.

The diesel engine actually produces about 60 per cent less nitric oxide than a petrol engine, but it is somewhat harder to control in a diesel engine. As with a petrol engine, the nitric oxides can be quite well controlled by fitting a catalytic convertor, though there have been problems with this approach because the high levels of oxygen in diesel exhaust gases can cause the 'cat' to work poorly.

The answer, though, is not far away, and already some of the technology employed by companies such as PSA (Peugeot and Citroen) and VW and Mercedes-Benz, goes a large part of the way to addressing the problem.

One of the best ways of ensuring that diesel engine emissions are clean - and nitric oxide levels are minimal - is to fit an exhaust gas recirculation system. This filters off a large amount of the exhaust gases before they come out of the exhaust pipe, and then sends them back through the engine, thus giving a more complete burn of the fuel, and therefore producing lower, less harmful exhaust emissions. Such systems are already fitted to cars such as the Volkswagen Golf Umwelt diesel, a car which also uses a turbocharger to boost power.

And much more can be done, as has been proved by a real-life experiment in Austria. Some five years ago, the Austrian government decided that all diesel cars should be fitted with full catalytic convertors. But for this to work properly, the diesel fuel itself had to have an extremely low sulphur content, and that meant the fuel companies had to clean up their fuel before it reached the forecourt pumps.

Because they had to do this for the Austrian market, additional research into cleaner fuel was carried out properly, and we are now beginning to reap the benefits of that research and development in the shape of the cleaner diesel we are buying today.

There is much more that can be done, and is being done, by the fuel companies, the components manufacturers and the car- makers. Key areas of development on the fuel front include mixing inexpensive methanol with diesel. This produces a low- cost fuel that is even cleaner than today's diesel, with the additional bonus that it is a fuel that can be used in today's diesel engine with very little adjustment.

The car-makers themselves are actively pursuing the development of light alloys, ceramics and reinforced plastics for diesel engines. Not only are these increasingly helping to make diesel engines more robust and refined, they also help keep down the weight of the diesel engine, allowing it go even further on a gallon and in so doing to have less of an adverse impact on our environment.