With rising fuel costs, the eternal question posed by the cost-conscious Indian buyer – what's the mileage – will be answered more definitely as the Bureau of Energy Efficiency has almost finalized fuel efficiency labelling rules.

Labels on cars are to be voluntary to begin with but will be mandatory by March 2012. No new car will be on the road without labels indicating how it fares in its class.

With fuel efficiency labels for cars to be mandatory soon, the auto industry will have to meet targets to improve fuel efficiency by 2015-16. The big improvements would be in the fuel efficiency of mid-range and heavier vehicles like SUVs.

The Bureau of Energy Efficiency has won its battle with auto giants as well as the road transport and highways ministry after almost two years. Now, both the government and industry are on board. Auto manufacturers will have to ensure that overall fuel mileage of cars they sell in a year meet a set target. The standard will be revised periodically to ensure better engines and technology with phaseout of older machines.

The auto industry too will be able to sell its worst models so long as they ensure the sale of more efficient models increases with time.

Bureau sources estimate that by 2015, the government expects industry-wide fuel efficiency to improve by 20-25%. It noted that average fuel efficiency across the auto sector has deteriorated with heavier vehicles gaining market share. This trend might be now checked with tougher norms.

Failure to comply the norms will lead to penalties through a name-and-shame policy that will affect brand names. The bureau expects to finalize standards within a couple of weeks after final discussions with industry and government.

While the bureau will notify the norms for both labelling and standards under the Energy Conservation Act, the road transport ministry will be mandated to implement them and monitor the industry under the Motor Vehicles Act.

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