According to Reuters an “influential” Michigan congressman said on Thursday he was preparing a bill to boost demand for diesel-powered cars and trucks in the United States through tax credits for oil companies and consumers.

Reuters said such a move has long been favoured by car makers, which see fuel-efficient diesel engines as a way to meet stricter fuel economy rules.

Few diesel cars are offered in the USA. Following the withdrawal of the Mercedes-Benz 300D, Volkswagen is the sole competitor but restricts its Golf, Jetta (Bora) and Beetle offerings to a sole 90bhp turbodiesel, rather than the more high-tech 100-150bhp PD line offered in Europe.

Reuters said that, in Europe, where fuel taxes have helped promote diesel-powered vehicles, low-emission diesels account for roughly 40% of all new passenger vehicle sales but those diesels rely on low-sulphur fuel to meet clean-air requirements, and US petroleum refiners have sued to stop a federal mandate to produce low-sulphur fuel starting in 2006.

According to Reuters, Democratic Representative John Dingell said, in a speech to a diesel technology forum in Washington, that he would propose a bill with tax credits for consumers who buy diesels that meet future emission rules.

Reuters added that Dingell, the ranking Democrat on the House of Representatives Energy and Commerce Committee, said his bill would also require petroleum companies to produce diesel fuel with sulphur levels of less than 10 parts per million by 2009, just below the government's standard of 15 parts per million.

The bill would give refiners tax credits to offset the extra cost of removing sulphur, as well as tax incentives to companies that meet the standard early, Reuters said.

Laura Sheehan, spokeswoman for the Democrats on the House Energy and Commerce Committee, told Reuters that Dingell's bill would not likely be introduced until the beginning of next year.